I've been a big fan of Netflix for years, but definately see the horizon on their mail to home business model coming to an end, or at least siginificant contraction as video on demand becomes truly viable.
The Netflix folks have been working with SilverLight and at the Mix 07 conference they presented a demo of their new video player - saying it took about 2 weeks to build.
It was very slick, simple interface with all the controls you'd expect from a DVD player controls.
Take a look at it here: NetFlix Mix 07 Demo