So, this is the most comprehensive discussion I've seen of the topic to date:
http://www.patriciabriggs.com/books/silver/silverbullets.shtml (OK, the source seems to be a blog associated with cheesy werewolf fiction, but anyhow . . . )
With some pretty cool results (love how they coated the inside of the molds with a thin carbon layer...held them over a sooty flame).
I'm not sure I buy the problems with how hard (purish) silver is with regards to seating into the rifling, etc.--much commercial ammo has a full copper-jacketed bullet and copper is harder than silver. However, that's over a lead core, so maybe that leaves enough "give" in the bullet.
I wonder what the mechanisms look like for jacketing bullets? Seems like silver-jacketed bullets would nearly ideal--should have better performance than copper-jacketed.
-B.