I have a HTPC (windows media center vista) hooked to a projector in my basement. It has been great for us to watch movies and play the wii. Recently I added a new plug-in to Windows Media Center called myNextflix (mynetflix)
This plug-in allows for us to watch Instant access movies from nextflix. It is great, my viewing pleasure has been increased now that I can quickly browse live access movies.
Currently I am watching MI-5 Volume 3. The quality is fantastic. I think the netflix play is using Silverlight. I am not sure, however the quality of the video and the performance has been great so far.