<p>Is it possible to convert an existing WPF Application to SilverLight automatically/with minimal effort?</p>

No.  Silverlight runs in its own cut-down version of the CLR.  It also is WPF-like, not WPF.  You'll have to do a fair amount of work to convert it.
Times have changed.  Check out
Portable Class Libraries
, now supported in .NET 4.0.  You can build assemblies that can be used on different supported platforms: WP7, Silverlight WPF and even XBOX applications.