Below are the step by step instructions for configuring Eclipse IDE with the eclipse4SL plugin package
Select the " Available Software" tab and click the " Add Site..." button.
In the Add Site dialog, fill in the Location with  http://www.eclipse4sl.org/update/, which corresponds to the eclipse4SL Web update site. Then click OK. If you encounter an error, it may be because you forgot the latest “/” in the URL or because you’ve got firewall restrictions. In the latter case, proceed with the Offline Installation procedure.
Select the  Eclipse Tools for Microsoft Silverlight entry and click  Install button. Please see below screenshot.
 
In the next dialog, check the  Eclipse Tools for Microsoft Silverlight, click  Next button.
Then read carefully the license agreement. If you accept all conditions, select  I accept... option and click  Finish button.
Now, restart your Eclipse for the changes to take effect.
 
To check the plugin installation is successful, you can select  Help->About Eclipse SDK. In the dialog box you will see a new icon with the eclipse4SL logo, next to the Eclipse Icon. .
 
When you click on the eclipse4SL icon, you should see the picture like below. Click  OK to finish
eclipse4SL installation
You’ve got 2 options to install the Eclipse Tools for Silverlight : Eclipse Update or Offline installation.
 
The Eclipse Update wizard consists in an online installation. You can use this solution if your machine is correctly connected to the Internet. The installation is pretty straightforward and it doesn't require deep knowledges of the Eclipse environment. The Eclipse update wizard finds and installs all the required plugins.
 
The offline installation is used when your machine is not connected to the Internet or in caes there is a firewall that prevents to access the Eclipse update infrastructure. You will be asked to download all required plugins beforehand.
 
To install eclipse4SL, open Eclipse, select Help->Software Updates....
 
Download:
eclipse4sl-runtime-1.0.0-M1.zip. 
eclipse4sl-SDK-1.0.0-M1.zip (will be released towards the end of October 2008) 
Unzip and copy it into the folder where your Eclipse is installed, not in Eclipse folder. All plugins and features must install under the plugins and features folder in eclipse respectively.