The following list of Windows Presentation Foundation (WPF) based applications should give you an idea of what can be achieved...

• Yahoo Messenger for Windows Vista - New IM client (SCREENCAST).
• New York Times Reader - Next-generation online reading experience for the NY Times (MSI).
• Microsoft Calendar Printing Assistant - Generate printed calendars from your Outlook schedule (MSI).
• Microsoft Expression Blend - Designer tool for building WPF experiences (MSI).
• Microsoft Expression Design - illustration and graphic design tool (MSI).
• Microsoft Windows Live for TV - 3D access to Messenger contacts from Media Center or IE (MSI).
• Electric Rain Standout - High-end custom presentation software (SCREENCAST).
• Wikipedia Explorer - 3D exploration of related articles from Wikipedia (APPLICATION).
• iBloks - Mashup application for creating 3D movies (MSI).
• RikReader - RSS Reader that integrates with Internet Explorer 7 (APPLICATION).
• Nostalgia - Yahoo! Flickr browser and photo manager (APPLICATION).
• Cine.View - Netflix movie queue manager (APPLICATION).
• Cool Text Vector Draw - A vector drawing program with 1200 fonts available via a web service (XBAP).
• Actipro Wizard - A control for building wizard dialogs in WPF (XBAP).
• UniveRSS - A 3D Vista RSS reader (APPLICATION).
• Xceed Datagrid for WPF Live Explorer - Hands-on demo of Xceed's free new Datagrid for WPF (XBAP).
• DominoKen - Artistic 3D XBAP demonstration from Microsoft Japan (XBAP).
• Denounce - Stand-alone podcast listener and blog reader (APPLICATION).
• British Library Turning the Pages - British Library's 'virtual viewer' for some of their most precious books (XBAP).
• ITN Hub Player - Video clips and news stories from ITN (APPLICATION).
• Evolution Media Center - HTPC Front-end with stunning animations and dynamic XAML-skinning (ZIP).
• OTTO - Online clothing shopping (APPLICATION).
• Metaliq - Snowboarding data visualization (ZIP).
• WeatherNews - 3D Weather visualization (XBAP).
• Shiseido - Make up online shopping (XBAP).
• DOSV - Computer Configuration (XBAP).
• Warner - Movie Previews and Showtimes (XBAP).
• Notescraps - Random information manager (MSI).
• Valil.Chess.WinFX - Chess game (XBAP, APPLICATION)
• NetAdvantage for WPF - Infragistics NetAdvantage for WPF 2007 controls (APPLICATION).
• fnac.com - French electronics retailer shopping experience - must set machine to French locale to run it (APPLICATION).

Thanks to Channel9 for the Application Portfolio as listed above.