I've rebuilt my engine using the latest SilverSprite sourcecode and can confirm the SpriteEffect flipping issues have been resolved - many thanks for that.
Here's a basic version of my engine running in Silverlight:
I had to add a check to see if GraphicsDevice.Root was null in the ApplyChanges() method (GraphicsDeviceManager.cs) as the Game_Loaded event fires after the graphical changes are applied.
Given how well the farseers physics demo and Dr. Popper run, I'm guessing that the poor performance in my engine is partly down to the use of SpriteFonts (unavoidable) and changing the colour values during SpriteBatch.Draw() calls (after a few minutes everything
slows down to a crawl). Will Silverlight 3 make it possible to address these issues?
Are there any other basic Silverlight/Sprite related performance tricks that I may have overlooked?