We are using C# most of the time for scripting. Compilation and integration on the fly is possible inside own applications. Even as a replacement for pure scripting is feasible in a nice way, have a look at http://www.csscript.net/
After a while, I came across IronPython. If I had to redo the scripting in my app I would opt for it as it proves to have a greater flexibility at runtime. There is no need for tedious AppDomain handling among other aspects.
