It's not immediately obvious how to make the background of your Silverlight control (1.1 in this case) transparent.

The way to do it is to modify the "createSilverlight" function in page.extension.js (like Default.aspx.js) to set the background to a transparent color and the isWindowless property to true. You'll then be able to see through your Silverlight control to the page behind it.

function createSilverlight()
{
 Sys.Silverlight.createObjectEx({
  source: "Page.xaml",
  parentElement: document.getElementById("SilverlightControlHost"),
  id: "SilverlightControl",    
  properties: {
   width: "100%",
   height: "100%",
   version: "0.95",
   isWindowless:"true",
            background:"#00FFFFFF",
   enableHtmlAccess: true
  },
  events: {}
 });
}