I agree that Netflix does have a good plan for their streaming box, but it falls short in many areas. After testing the Netflix streaming on Xbox 360 against my VUDU box, I can see a clear difference in picture quality. Also, Netflix has a long way to go with any HD titles, and I don't know if there box can even handle really good quality.
Personally I want my movies in great quality, and instantly available. Netflix can't deliver this yet.
I'm going to stick with my VUDU now and just use the Xbox for games.