We describe the linear viscoelastic response of dispersions of droplets of two biphenylcarbonitriles that exhibit both isotropic and liquid crystalline phases, 4'-pentyl-4-biphenylcarbonitrile (5CB) and 4'-octyl-4-biphenylcarbonitrile (8CB), in polydimethylsiloxane (PDMS). The Palierne emulsion model agrees well with the storage modulus data for 8CB in both isotropic and nematic phases, but the model overpredicts the magnitude of the interfacial relaxation in the 5CB dispersion, where the volume fraction of the dispersed phase required to fit the data is substantially smaller than the actual value. Similarly, the interfacial tension of 5CB against PDMS deduced from the Palierne fit shows much less temperature dependence than values measured with pendant drop tensiometry. The 8CB droplets are small, with a narrow size distribution, while the 5CB droplets are considerably larger and have a high degree of polydispersity. The basic mechanics of the Palierne theory appear to be applicable to nematic liquids, at least under conditions where the entropic elasticity is weak relative to the interfacial stress; the data suggest, however, that the theory is not applicable to smectic systems, and it needs to be used with considerable care with large droplets accompanied by a large degree of polydispersity. (C) 2005 The Society of Rheology.