I recently set up my system to stream netflix movies through my XBOX360. I like the interface well enough, the price is good, and the convenience is great
(1) The vido quality is really sub-par. On my 1080p projector with a 105" screen, the Netflix streamed video looked so out of focus that I could barely watch it (I am not exaggerating at all). This is, of course, a result of a very low quality source being upconverted.
(2) Movie selection is laughable. It's NOT the entire Netflix library....or anything even close. There are a handful of newish releases, a handful of decent movies, then a few hundred absolute crap movies.
I would assume that video quality and selection will improve over time. I certainly hope it does anyways.
For those of you using average sized standard def TVs, the picture quality should be fine....but you'll struggle to find decent movies to watch.