So when Netflix first launched streaming I gave it a shot and wasn't too impressed. Apart from having to sit at my computer watching something (two-hour WoW raid no problem, two-hour movie different story) Netflix determined what quality image based on the connection and you couldn't force a higher one as with most streaming media. And there were lots of pauses, pixellation, etc.
But with the new Netflix rates I decided to test it again on my actual TV before dumping it and the test was surprisingly effective. I set up a network so I wouldn't have to haul my modem around and after several days I'm pretty much hooked. The image is usually DVD-quality or close enough to not matter and I've consistently received almost perfect streams. The only image problem I've had from the streaming was one film with some compression artifacting but it was not only a very low-budget effort but filmed fairly indifferently and I suspect that the transfer was shoddy as well. Over these days I've only had a few pauses but they were under a second and all happened during the same hour so I think it was a connection issue.
The only consistent issue has been some subpar originals. Watched a minute or two of Ophuls' Caught and it was VHS quality and fairly indifferent VHS at that. A 70s Christopher Lee film I sampled was also blah quality and most likely a TV print. On the other hand the 1945 Republic B The Vampire's Ghost had an excellent transfer. So most of these other titles not on DVD have been a mixed bag.
In fact it's these extra non-DVD films that have been the hook for me. There's a surprising number of 40s musicals that not only have I never heard of but I've never heard of the performers. Plus many 50s crime/quasi-noir films, several poliziotteschi (English-dubbed of course), a lot of 60s spy and adventure films, 50s British comedies, etc. Plus oddities like Bogdanovich's notorious At Long Last Love, Guy Maddin's My Winnipeg, the Malick-scripted Deadhead Miles, Altman's early The Delinquents, Tashlin's It's Only Money and so forth.
Of course some of the stuff that's streaming-only at Netflix actually has DVDs but the company is definitely clearing out or not replacing many titles on disc and not always the obscure ones. The days when it had most DVD releases are long gone and today it's not even pretending (though you can't tell from the press releases). There's still not as much streaming as you might expect given that Netflix is pretty literally betting the company on this - out of their Top 100 list there are maybe a handful streaming and most big current releases don't show. I suspect this is one reason the interface is so clunky - make it hard to navigate and it creates the impression of lots of stuff where if we could easily see just a title like the DVD queue then it's clear what's missing.
Another bonus has been the TV shows. I'm hooked on Warehouse 13 and this lets me finish the second season without constantly waiting for DVDs. Even better I can sample shows I was curious about but never felt like putting into a DVD queue - Parks and Recreation, Damages, Breaking Bad, Thriller, MI-5. Or to check out Farscape since people have raved about it and the descriptions sound like my kinda show but the first ep I watched didn't grab me. Now I can check a bit more. Plus older Doctor Who and my current guilty pleasure Psych. And Netflix resolves one problem I always have with TV which is remembering what I've seen. It stores where you left so when I pull up say Warehouse 13 it's ready to start the next ep.
And did I mention just a ton of MST3K?