Wintellect wrote a good comparison between Silverlight and WPF published here:
http://wpfslguidance.codeplex.com/Release/ProjectReleases.aspx?ReleaseId=28278
From personal experience in WPF and Silverlight I've found that SL is fully capable for LOB apps. The .NET RIA Services are an excellent addition to SL3 for LOB apps. To answer your last questions, there is nothing in my experience that holds SL back from creating LOB apps. The only significant difference between WPF and SL in this discussion is that SL doesn't have access to the local resources on the client machine such as the registry and can't access Windows specific features that WPF can such as Windows 7 jump lists or libraries. I think Silverlight is the best choice for biz apps due to ease of deployment and ability to target multiple platforms.
