At today's Microsoft roundtable, we saw the new Xbox 360 Netflix streaming service in action. Users can expect an experience very similar to that of the Roku box or Netflix on PC, as all the content still comes from Netflix servers. In other words, the 360 will feature the same SD quality video we've seen in its other incarnations with identical on-the-fly bitrate adjustments.
Another important point is that users will need to use a PC to build their download queue. As inconvenient as this may sound, at least the system syncs very quickly. (It only took about 3 seconds for a movie saved through Netflix's website to appear on the 360.) The navigational control are identical to those already used for DVD and video file playback. And pulling up the new Xbox dash from within a movie is entirely jitterless.
The only catch is that you need to be a Gold subscriber...but who honestly uses their 360 that isn't already? All-in-all, Netflix on the 360 is looking very promising.