I've heard their steamer/player is pretty good, but from what I've read the quality of the playback is all in the speed of your internet connection. The slower the connection the more compression (I guess) is used. Another interesting thing is there are a couple of Blu-Ray players out now that can stream Netflix as well.
I had my TV unhooked a while ago and was streaming some movies (on the computer) as my only entertainment. The selections of movies I see now have actually gotten better believe it or not. I hope they add more.
A while back I bought a DVI to HDMI cable and an optical cable to go from my computer to my home theater system so I could do the same thing. Stream Netflix plus play some games on the wide-screen. I still haven't hooked it up.
Pretty cool gift. Congrats!