@rnd me: Sort of like a .NET/JS version of Adobe AIR?
somewhat. there's no IDE, and to be fair, jScript.net is not 100% ecmaScript compatible. But, it's close enough that a lot of scripts work outright.
the big problem is that there is no window or document: i think AIR has a normal, yet embedded, browser environment.
however, you can use the whole rich array of .NET's class libraries, including windows forms, IO functions, advanced input capabilities, sound generation, etc.
I've only use it for command-line apps and utilities like file renamers, script packagers, and remote content updaterers. Using .NET forms, you can create a GUI application, it's something i've never had the need to do though, so i can't comment on how easy that is. I think there is an embeddable browser control, so it might be possible to wrap that around your browser-targeted program, and at least use IE7 for an interface. Again, never tried...