<p>I guess this is a multi-part question.</p>

<p>I can import a 3D model into my WPF application but how do I apply an ambient occlusion shader effect to it? 
I know with .NET 3.5 SP1 you can do custom effects but that's limited to pixel shaders and doesn't include vertex shaders.</p>

<p>I think i can do this with an XNA application but Im not familiar with XNA so the second question is:
How much different is WPF and XNA? I don't seem to have any notion of XAML in XNA. How much ramp up would moving from WPF to XNA take?</p>

<p>Thanks,
Chris</p>

To answer your second question:
WPF and XNA are completely different.  They do share the following:
Built upon .net
Use DirectX
Can access hardware acceleration of the video card
XNA does not have any GUI support built in and is really aimed at games (for PC and XBOX-360) whilst WPF is usable in business style applications.  As you've discovered XNA does not have any XAML support, indeed it is mainly an abstract .net wrapper for DirectX.