what is the purpose of using wpf over silverlight?

if your client application is mainly a front end for back end data – Silverlight4 is perfect and sufficient.
But if your client application needs deeper integration with the client machine and other things that reside client side, it may be possible to get it done with SL4 elevated trust OOB, , but it will likely be more challenging and you may hit brick walls that kill your productivity or functionality.
I prefer WPF is going to make your life easier.
See some differences explained by Brian Noyes, a Microsoft Regional Director and MVP Let me run through some of the key differences that make me hesitate to jump too quickly to Silverlight4 when choosing a client application technology.
File access: WPF – Unlimited Silverlight – User profile special folders (My Documents, My Pictures, My Videos, etc.) Printing: WPF – Many options, access to Print Dialog, control print queues, etc Silverlight – Print a UI element programmatically Documents and editing: WPF – Flow and fixed document, RichTextBox editing and integration with flow document Silverlight – RichTextArea control with most functionality of the WPF RichTextBox Commands: WPF – Support for raising commands on buttons, hyperlinks, menu items; input bindings tied to commands for keyboard shortcuts; routed commands implementation in the box Silverlight – Support for raising commands on buttons, hyperlinks, context menu items, no input bindings, no routed commands Communications: WPF – Full range of WCF capabilities, able to consume and host services of any kind, full range of security options and other WS-* protocols, REST, low level communications of many kinds Silverlight – Limited subset of WCF client capabilities, no ability to expose a service from the client, unsecured TCP or HTTP protocols, duplex less capable than WPF clients (polling HTTP or unsecured TCP only), some socket level capabilities, have to take cross domain considerations into mind in most deployment scenarios.
Clipboard: WPF – Any kind of serializable objects Silverlight – Text only Drag Drop: WPF – Any kind of object Silverlight – Files only External devices: WPF: Anything with a driver, COM, Win32, or communications protocol Silverlight: Webcam, camera, microphone, and devices with a COM API or compatible communication protocol Input: WPF – Keyboard, mouse, pen, touch no real limitations Silverlight – Must be OOB elevated trust full screen to have full keyboard access Hope this answer is helpful Happy coding

For application that needs to "talk" with the machine and/or it's devices [Printers for example] use WPF

 

For applications implemented in a multi-client per server environment use silverlight [ it will save you the hastle of installing the client on each and every machine that uses the app. and any updates you make to the system will be applied smoothly]

Both WPF and Silverlight are built on XAML.
There is no purpose of using WPF over silvelight, it depends on the scenario.
If you are building a desktop application you will use WPF, but if you are building a web based application you will use Silverlight.
Hope this was useful.

WPF for windows application and Silverlight for web based application(ASP.NET).