Well, after looking around the Netflix site and realizing they've insulated themselves from feedback by not offering any way for customers to contact them, I wound up calling Netflix Customer Support to lodge a complaint about the unresponsiveness of the UI. Told the CS Rep that it could take 14 seconds for graphics to load (actually selected a specific genre on the app while on the phone, and it took that long), that there was a frustrating lag for every button press, and that frequently there was no response to any given button press, so I sometimes have to press a button two or three times to get anything to happen. This of course makes fast-forwarding or rewinding to a specific point a nightmare.
She initially seemed helpful, but after putting me on hold to check with the Watch Instantly experts, she said they hadn't seen anything like that with their own PS3s, and that this was the first they'd ever heard of it. She then tried to pass the blame on to Sony, saying that the Watch Instantly staff said it may be "hardware issues", and that maybe I should see if Sony could look into it. I reiterated the fact that the app initially worked beautifully, that it had been fast, smooth and responsive, but these problems had manifested (for me, at least) a month or so ago.
I also asked if she even knew what "hardware issues" actually meant, since she was implying that I needed to do something to fix the problems. She stammered a little and suggested that maybe it was a problem with hard drive space; I pointed out that the 250GB free on my hard drive suggested that wasn't it.
I'd strongly recommend that anyone with problems with the Netflix app take the time to call Netflix on Netflix's dime. If the CS rep was correct or honest, they seem to have no idea that there's a problem. As I pointed out to them, it used to work fine, so fixing it should be possible. I also pointed out to her that I've got 190 items on my Watch Instantly queue, so if I wound up canceling my account it wouldn't be because I couldn't find anything to watch - it would be because it was too much work getting to what I wanted to watch.