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Well my first reaction is the same as yours, but since python is OSS the possibility does indeed exist that this could be emulated amongst other browsers without needing Silverlight.

The runtime API they present to python though, while it seems to be just the DOM exposed, would still need to be documented and standardized.

But IronPython is FOSS. The fact that it is being bundled in a closed source plugin seems like an implementation detail to me. If Firefox wanted to they could expose this very same implementation of a python runtime engine.

Dear god, this, yes.