For now, developing a WYSIWYG editor for Silverlight is not in our development plans.
The main idea behind RadRichTextBox is to load, edit and save rich text content. You can take a look of the help article about format providers and data providers (components used for data binding RadRichTextBox) - note that there are various image export options you can use if the default one doesn't fit your needs.
Don't hesitate to contact us if you have other questions.
the Telerik team
Registration for Q1 2011 What’s New Webinar Week is now open. Mark your calendar for the week starting March 21st and book your seat
for a walk through all the exciting stuff we ship with the new release!