Microsoft released Smooth Streaming extension component beta for IIS7.
Here is a short description of Smooth Streaming:
Smooth Streaming enables affordable adaptive streaming of media to Silverlight clients over HTTP. It dynamically detects current network and local PC conditions, and seamlessly switches the video quality of a media file that a Silverlight player receives. Consumers with high-bandwidth connections can experience true HD (720p+) quality streaming, and others with lower bandwidth speeds receive an appropriate stream for their connectivity, allowing the audience to enjoy a consistent high quality streaming experience without buffering or stuttering.
You can find more info and download the extension from