I am pretty sure that CharacterMarker symbols draw faster than PictureMarker Symbols, thats assuming your using just one layer in your CharacterMarker symbol.
This link has some good information:
The drawing performance of marker
symbols, whether used to symbolize
points or as a component of one of
the other types of symbols, can be
improved greatly by using simple
marker symbols and single-layer
character marker symbols; these are
the best choices for symbolizing
large point feature datasets.
emf pictures will draw faster than .bmp pictures
If it were me, I would try both, and then use the 'preview' option from the Map Service Publishing Toolbar, to get an idea on which one draws quicker.
In terms of consuming this in a Silverlight application, I would also consider looking at using a clustering technique to render your points when at small scales.