I’ve updated the WpfeHost control to fix the IE problem, but it now requires that you add a line in the HttpHandlers section of your web.config file. When you drag-n-drop the WpfeHost onto a page, it adds a comment inside the control that reminds you to do this.
I don’t love this solution, but to fix the “Click to activate” problem with IE you need to have an external JScript that creates the OBJECT tag. I also could not find a good solution for adding this line to the web.config when you added the control to a page. Evidently I am not the only one, this problem happens with ASP.NET AJAX controls as well.
Let me know what you think!