If you want to use Silverlight, you must have a CPU with SSE instructions - for that reason the Silverlight installer refuses to install if you don't have SSE on your CPU. Turns out this check doesn't work properly on some AMD processors. If you have this problem, listen to what rpomeroy writes on the official Silverlight forums:
I've seen a few reports where a CPU that definitely supports SSE doesn't return true when the Win32 function to check for SSE is called.
The SSE check is done in the Silverlight installation executable which wraps the MSI install. You can extract the MSI and MSP from the exe and install using msiexec.exe. Note that if your CPU doesn't support SSE and you install in this manner and run Silverlight applications your browser will crash when Silverlight runs SSE instructions (that's why we block install if we don't think your CPU supports SSE).
To install using msiexec.exe, download the Silverlight installer (uninstall Silverlight, restart your browser, browser to www.microsoft.com/silverlight and click the link to install Silverlight then save the exe instead of clicking to run it) and then run it from a command prompt with the /x argument. If you are on Vista with UAC enabled, make sure that you run the command prompt as an administrator (elevated). Running with /x will prompt you for a location to extract to - enter a temp path such as c:\sltemp. CD to the c:\sltemp directory in your command prompt and run "msiexec.exe /i silverlight.msi" to install the baseline followed by "msiexec.exe /update silverlight.msp" to patch it to the current version.
As I said above, if your CPU doesn't support SSE, don't install this way. Silverlight really does require SSE so circumventing an accurate check for SSE support is not going to help you. Executing CPU instructions on a CPU that doesn't support them is nothing but a quick way to crash.
If you follow these instructions and Silverlight crashes - you probably don't have SSE support. Uninstall Silverlight to make it stop crashing.Didn't work for me, though. Nothing crashes, but the plugin doesn't work, either. Another point for Flash, which, in contrast to Silverlight, works virtually everywhere.