I've been playing a bit with VS.NET '08 June CTP lately and noticing several nice improvements - the Cider WPF add-in especially seems to have better integration with the code window.  For example, double clicking on an element now creates the code-behind handler (finally!).

The layout support is much better as well - you finally get the drag handles and positioning lines.

The property sheet seems a bit sketchy right now - I see how Blend has certainly influenced it (as the code apparently is coming from that product), but I find Blend to be easier to work with there.  No support for Data Providers either which is a bummer.

Bindings are still not as nice as Blend; manual addition seems to be the only way to do them at this point, however Intellisense is *much* better now.  There's also a nice zoom bar present which allows fine-detail work to be done when drawing graphical elements (such as Control Templates or even just 2D/3D shapes).

Overall, I'm seeing some good progress - here's hoping for more as the product matures!