I'm deciding which I need for my new LOB application. I will list PRO's of each and if I'm wrong - correct me please as this is how I see it.In BrowserUsers can navigate using URL's. I see it as a BIG thing. Users can share links like  app.com/orders/12345With elevated permissions I can do all the same stuff. Use COM, file system, etc.I can open other browser windows with other functionality if multi-window needed. The only difference - I won't have such control over those windows as with out of browser.Out of browserRuns out of browser. Not sure why I care?More problematic to handle updatesYes, there is windows I can open but not modal. So, in-browser separate IE window almost identicalDo I miss anything? I tend to keep it in browser but I want to see where I'm limiting myself.
Silverlight 5 In or Out of Browser?
design;silverlight
Note that your #2 of having elevated permissions in browser is only available with Silverlight 5.  If you want to deploy to production soon, and need to do COM automation, you have to use out-of-browser.I don't believe it is more problematic to handle updates with out-of-browser as you state.  Even though the application is installed it is really just a pointer to the same Silverlight app deployed on your web server.  If you push new bits, your out-of-browser users will execute the new bits the next time they launch the app.In general for LOB apps I prefer in-browser for the same reasons you list.  Also, our portfolio has a mix of Silverlight and ASP.NET apps so in-browser allows for them to look more consistent between each other.I would only go with out-of-browser when it was important to the users to launch directly from the desktop and have control of the entire screen.  For certain applications like game, having the chrome of the browser surrounding the application might be a downside.