Adobe AIR and Microsoft Silverlight should not be compared.
Understanding the difference
The only thing both have in common is that they are new technologies.
Adobe offers AIR to allow their existing customers, RIA developers and designers, to extend their applications from the web to the desktop. Microsoft offers Silverlight, in similar fashion, except it wants to leverage its existing desktop application customers to build RIA apps for the web.
Understanding competitive goals
As far as being competitive, I’m sure Microsoft would love (and is aiming) to draw existing Adobe customers away from leveraging Adobe’s development and design products like Flash, Flex Builder, Fireworks and Photoshop. In turn, Adobe could likely draw existing Microsoft-technology desktop developers into adopting their products if perceived as an ‘easier and more efficient’ way to build desktop apps.
Who will win?
The consumer (the RIA developer or designer, as well as existing desktop developer) will win. Competition fuels more features, better pricing and more options. No doubt, if you find ‘your religion’ to be either Adobe or Microsoft, you’ll find virtue in what each company is doing.
Adobe is sitting pretty well in this bid for adoption and creating the desktop mindset. The primary reason is a combination of their existing mass adoption of Flash Player. Another contributing factor is the assumed decline in PC/Windows market share as Mac adoption continues to grow. Lastly, web 2.0 has created a surge in RIA skilled developers, where as traditional development has seemingly leveled-off. Combine all these, and you can understand why AIR has tremendous potential in drawing existing and new customers into the desktop development space.
Microsoft has the power and capital to move more powerfully in one director or another. Look for them to make necessary corrections quickly, be competitive with pricing, and flick on a couple of magic switches that will rapidly increase the adoption of Silverlight.