The most common type of converter is one that converts to and from a text representation. The type converter for a class is bound to the class with a TypeConverterAttribute. Unless this attribute is overridden, all classes that inherit from this class use the same type converter as the base class.
The most common use of TypeConverter in Silverlight is to provide the processing for setting XAML attributes and generating object values, both for Silverlight defined classes and custom classes. See TypeConverters and XAML.
For supporting the string creation syntax of custom types that are specified as attributes in XAML, you should at a minimum implement CanConvertFrom(ITypeDescriptorContext, Type) and ConvertFrom(ITypeDescriptorContext, CultureInfo, Object) in your TypeConverter class.