The Physics Helper Library for Blend and Silverlight (more info here) now supports Farseer 2.0! Thanks to Ian Qvist (aka Genbox on the Farseer Project), I was able to resolve the tunneling issues with Farseer 2.0.

You can get the update (1.0.0.4) on the Physics Helper Codeplex site.

If you are using Farseer 2.0 outside of the Physics Helper controls and are seeing similar issues with tunneling (objects passing through each other and becoming "stuck"), then you might also want to try Ian Qvist's suggested fix:

In PhysicsSimulator.cs - change line 63/64 to the following:

internal int maxContactsToDetect = 10;
internal int maxContactsToResolve = 4;

Thanks Ian!