I have watched videos explaining how to customize one of the default menus, but is it possible to build a nav menu from scratch? Possibly using silverlight as your main menu?

Yes, you can do that. I'm not sure that I would recommend going that way but, the extensibility of DotNetNuke is its strongest feature. So ... you can build either a skin object or a module to provide the navigation functionality, and using any technology that you want to use that fits in the ASP.NET framework.

You could create a static silverlight menu built into the skin itself - but this would take away your menu integration. If you wanted to use a "landing page" main menu and use a child menu, say on the left or right of the page, that might work well. However, the user would NEED to have silverlight installed. It is still only at something like 40% adoption (Flash is actually much higher, but less reliable in the programming aspect, I think, it is easy to create a runaway peice of code that locks up or shuts down your users machine).

There are already quite a few customizable menu modules and skin objects available - some use jquery, etc. - and there may also be some using silverlight now. If you are looking for more animation, customizing jquery menus might be an option too. I am more of the mind that good navigation wins out over bells and whistles every time. It doesn't matter how pretty your site is if users can't get around.

^_^