One thing I noted about XAML is that both the code and the XML parts need to be compiled before using them -- although the XAML can be interpreted by Explorer in some means, perhaps by compiling it when needed.
From what I can tell there is no XML at run-time, meaning no DOM-manipulation. You need to use all new APIs to manipulate the UI. Actually, the whole thing works very similar to Mac OS X, which stores UI descriptions in XML which map to classes. Apple doesn't promote this much though as they prefer that people use the visual tools.