I've often wondered the same thing about Queen Silvia myself, regarding religion: all I know is that her background was German, and she was raised as a Lutheran (just like her father) -- meaning that no conversion or dispensation was necessary, when she married King Carl XVI Gustaf. However, her mother was on record as having been Catholic (no surprise, given her Brazilian background).

The fact is that in Germany the rules on children born to interfaith unions involving Catholics were inconsistent: I've heard conflicting explanations, and have come to the conclusion that it often depended on the specific circumstances.

Ordinarily, when it comes to a mixed marriage involving a Catholic (requiring a dispensation from the Church), the Catholic party dominates: most of us are familiar with the stringent requirement that both parties promise in advance that all prospective children born to the union will be brought up in the faith.

However, there are two catches to this requirement: 1) It did not become OFFICIAL in canon law until 1910. 2) It has been inconsistently enforced throughout history -- especially in Germany, where it was strongly resisted (and the pope being obliged to make an exception).

According to one explanation I read, the German custom was actually to have all children brought up in the religion of their father, not mother: that would explain Margaret Majer Kelly (mother of Princess Grace of Monaco), daughter of German immigrants, raised as a Lutheran (just like her father, Carl Marier) -- despite her mother (Margaretha Berg) being Catholic. To be sure, she converted to Catholicism later on in order to marry Jack Kelly, an Irish-American Catholic.

Another explanation I read had it that in Germany, sons followed their father's religion while daughters followed their mother's: indeed, Princess Konstanze of Hohenlohe-Langenburg (sister of Prince Karl Ludwig, who married the half-sister of Queen Victoria of Great Britain), married a Catholic (Franz Joseph, Prince of Hohenlohe-Schillingsfürst) under this agreement.

But another sister of Karl Ludwig, Agnes, also married a Catholic (Konstantine, Hereditary Prince of Löwenstein-Wertheim-Rosenberg) -- and in their case, all the issue were raised as Catholics. Perhaps it was because the children became orphaned early and were raised by their paternal grandparents. Understandably, the said children (regardless of sex) would have all been brought up in the same faith.

This had important ramifications, since one of them was the famous Princess Adelheid who would marry, in 1851, the exiled King Miguel I of Portugal.