I am wondering how Silverlight 3 compares with Adobe's FLASH?

I've read that Silverlight is catching up to Flash's capabilities. I've also heard one colleague state that Microsoft will never achieve the degree of graphics capability which Adobe has. I am not sure about my friend's poiint of view. (He may be a bit biased since he codes in Adobe's ColdFusion and uses Flash.) A member of my user group used .NET with Flash and said it's a bit kloogy but works. I am only attempting to do a precursory review of Silverlight right now. I am also working through a book called "Beginning Silverlight 3" by Robert Lair (APRESS). Robert literally walks the reader step-by-step through each aspect of Silverlight, which is what I need at this point. I did discover that Silverlight either doesn't do audio, or doesn't yet do it well. I am not yet clear on that part of Silverlight.

So, again, where does Silverlight 3 stand in comparison to Flash? Will version 4 be a big leap for Microsoft?