It only does that if available bandwidth on your connection to Netflix gets shaky (which may or may not have much to do with bandwidth between you and your service provider). I usually see it blink at the beginning as it ramps up to the higher bit rate encodings, but most of the time I can watch for hours and not see it happen at all. Many people say that they've never seen it.
As I said, it's my favorite Netflix player for now--I assume that the Roku 2 will blow it out of the water .
I have to say that I'm not in love with the Roku Netflix GUI--it's pretty anemic in comparison to the one on the BDT110, which used to be the one on my PS3:
In that one you can see 10 title thumbs from the group that you're browsing (instant queue, genre, etc), it breaks the genres down into several subgenres each, and displays up to 250 titles in any group. It's not particularly pretty (IMHO), but it's the most powerful embedded one that I've seen.