It depends. About 80% of what I watch on a 47" and 60" set looks like high quality VHS. The stuff marked "HD" looks like it almost might be dvd quality. Some movies look better than others, so they must be compressing with different rates or maybe the longer movies suffer more. Its watchable and the instant-ness is nice. Our biggest user is my 5 year old, although almost everything available is second or third tier material, sequels (but not the original) and odd stuff from other countries. He likes a lot of it though and can use the roku remote to select and play his own, its so simple he mastered it at 3.5.
You're going to need to get at least 3.5Mb/s consistent download speed to keep the pipe full for the HD content. Word has it that they're going to offer some higher quality stuff but you'll need 5-6Mb/s real throughput to use it.
Other thing is the selection. Its fair to terrible. They do offer a fair number of decent older movies but they're often offered only for a short time.
Good news is the cost of entry is pretty low since any playstation 3, xbox or wii will do the netflix on demand, many dvd/blu-ray players can do it, and the roku boxes arent that expensive.
