I had a situation where I didn't want you use an ASP.NET Web Project as my Silverlight host page.  The reason I needed to configure my application using ASP.NET website is because I needed to utilize the Profile object built in for membership.  However this caused an issue, it wouldn't let me debug my silverlight application.  I had to manually copy my XAP file to my ASP.NET Website before I ran it each time but I lost the debug capability. 

To solve this I selected the Property Pages option on my ASP.NET Website project.  The new pane called Silverlight Project now shows up in which I can add my silverlight project output to any directory I want, including debugging capability.

Below is the screenshot: