The best of the Netflix HD, which includes all of the recent and current season HD television series, is pretty good, though I wouldn't say that all of them are as sharp as the same series on television. (I watch Legend of the Seeker on my Xbox as well and I can't speak for how it compares since the stations which carry it in syndication locally don't broadcast the HD version). However, not nearly all of the HD streams are as good as those.
EDIT: I found something that I could compare: Torchwood: Children of Earth, Part 1 as an HD Netflix stream played on my Xbox to the same content from Blu-ray played on my PS3. I was surprised that the comparison was pretty favorable. The Blu-ray was a bit sharper, but I had to pause and match frames to see it (of course, the Blu-ray had a DTS soundtrack). Not bad at all, but as I said, not all Netflix HD streams are as good as the recent television stuff.
(As an aside, in the list of episodes for Children of Earth on Netflix, Part 2 is labelled "Episode available on disc only"; the other four parts are there. Isn't that great ? Thankfully, I don't have to watch it as a Netflix stream).