I’m very impressed with the video quality of Netflix’s on-demand streaming service to the Xbox 360. If your internet connection handles it, it streams what appears to be 720p resoluion, and up to about 4-7 Mbit/sec as measured by my router. At the highest bitrate, I don’t see any noticeable artifacts. It looks excellent.
(Unfortunately, I am not as impressed with Cablevision’s Optimum Online cable service, which usually delivers 12M/2M speeds but keeps capping out at 2-5M tonight. Netflix handles this gracefully by pausing playback and rebuffering at a lower bitrate.)