What's the deal with patents on mp3? I know Fedora linux doesn't include mp3 encoding or even decoding because of patent encumbrances, although Fedora does appear to be extremely strict about what they include as a base package. Did you manage to get a license for the decoder that's already in NAudio, or are you just taking advantage of the fact the patent owners no longer pursue authors of free-beer mp3 decoders? I believe it's still the case that anyone distributing encoders in binary form, even if for free, should probably expect a cease & desist order in their future. There's a reason lame can only be downloaded from sourceforge in source form.
To support Silverlight / WP7, I would think the ability to make use of Microsoft's WMA Encoder would make more sense, since that can be used for free by anyone with a valid Windows license.
Now Ogg support is a different matter...