Well...
Living out here in teh sticks has its disadvantages: Lack of cable TV. That can be a very good thing too though.
For Christmas my wife got me an LG Blu-Ray player that had Netflix streaming built-in. I decided it was time to activate it last night.
All I can say is that I'm impressed. As long as you don't have picture quality expectations set too high and watch it on a huge tv set, its actually quite good.
My test movie was an older Dr. WHo episode from the early 70's. Shot in film, converted to video, cheap budget.
How the streaming works is that it senses your bandwidth when communicating to the Netflix servers and gives you a movie wuality based on what you can handle. Since I have satelite internet, my quality, based on Netflix, they set it to 50%.
The quality is better than I expected on my 43" plasma. Looked similar to a DivX rip of a dvd. If you had a lot of motion (waves on water for example) it got really blocky. All in all though, it looked pretty good. Pause, fforward, and rewind all worked as well.
Now I just have to watch my download limits.
For those interested they do have a free 2 week trial. Also, not all shows are available for streaming.