I rejoined Netflix late last week, and their partnership with Microsoft is definitely a much better deal than I expected.
As I said before, my trial of Netflix last August left me with low expectations for the online service that would reach Xbox Live. Little of the streamable content was worthwhile, most of it being decades-old B movies or worse. Since then, Netflix has signed a deal with Starz, which adds plenty of films that are actually good and well-produced: Goodfellas, No Country for Old Men, Enchanted, etc.
They also seem to have made more TV series available for streaming. Some, like NewsRadio (Phil Hartman is hilarious!) and The A-Team, are available on Hulu for free. But now Netflix also has many seasons of Law & Order, CSI, Dead Like Me, and other popular shows.
I watched many movies and TV episodes over the weekend and had no problems with stream quality. Keep in mind, though, that I have an old CRT television and cable-quality internet. If you have an HD-TV or slow/choppy connection, I suppose your stream quality could be worse. Regardless of how often the current streaming strategy works, it seems nonsensical that users are not allowed to forego live streaming and instead choose heavy buffering for better resolution.
It's also disappointing that so many triple-A films which can be purchased for download elsewhere (i.e., are already available in a disc-less format) are not available for streaming, but I can only assume that's due to the film publishers.
But the benefits outweigh the shortcomings. I now have over a hundred films and TV shows in my queu. All of them are on-demand content with DVD-like controls and no commercial interruptions. As long as I'm a member of Netflix, I can take all of that content with me when I travel. It's a sweet deal.