Let me answer ur question in simple terms. I guess ur new to this...
Difference b/w version 1.0 and 1.1
1.1 has got a lot of cool features than in 1.0. But it still supports all the features of 1.0. In 1.0, you can use only javascript to control the silverlight application. But in 1.1, you can use .Net languages like C# and Vb.Net (javascript is still supported).
What is required at the client end to view web site with both the versions
If the client has Version 1.1, then its enough. He can view both 1.0 and 1.1 application... 
Which version is shipped
When the user tries to view 1.0, it asks to download 1.0. (As 1.1 is still in Alpha - Not mature enough)
when he tries to view 1.1, then it asks to download 1.1
If the client has got 1.0, he cannot view 1.1 applications but if he has 1.1, then he can see both 1.0 and 1.1 applications.
I hope this answers your question.....
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Thanx!...