One of the promises of Avalon (WPF) and XAML, for me, is of new and beautiful UI's. Something that I call "Simple Complexity". What is "Simple Complexity". It's something you experience everyday. It could be the smell of a rose; rich, layered, sweet and peppery and at the same time condensed down into a simple experience. Or the experience of great food, be it Bar-B-Q, Ben and Jerry's Ice Cream or green tea crème brulee. In that experience each item has many components that boil down to one thing. It's parts come together into a wonderfully simple single experience. Now I'm not saying that by using WPF and XAML that people will love your app like Carolina Style Bar-B-Q, unless your secret sauce is a design that is rich, layered, well thought out and tested.
To follow the food metaphor, if you think about how many restaurants are out there and how many fail and how few become superstars (Flay, Seeger, and the like) we're bound to see the same thing happen with new app that use XAML & WPF.
Remember the early days of HTML? The dreaded Blink and Marquee tags? How about 23 colors and 17 different fonts on the same page. Brace yourself, because we're going to see the same thing again. However the good news is that some folks out there are going to get it right.
Do you need a starting point? Check out what's being done in Vista and Tiger. And emulate them.