Just picked up a Ruku HD (came in the mail today).
I got it mostly to watch MLB.TV on the HDTV, and I've got to say....FREAKIN' AWESOME!! Only downer is no way to automatically skip to an inning (which you can do on a normal computer).
Picture quality is pretty close to regular HD. Sort of like crappy Comcast HD (I'd give a slight edge to Comcast...not as good as Satellite HD). I have seen a slightly better picture on my laptop, but only when I'm at work. It is much more reliable on the Roku than on my laptop (at least when I'm at home, at work I have a repulsively fast connection).
My sister has Netflix, so I'll add that when I can get her password (she isn't into the tech thing enough to bother with leaning anything new). I'll report back with picture quality for Netflix (unless someone else can comment about it).
This thing is TINY as well. It's about the same dimension as a CD case (but taller, obviously).
I have to say, best $99 I've spent on the entertainment center.
If you're into MLB I think you can get the Roku HD for $80 with a MLB.TV subscription. As a huge Mets fan living in Colorado, MLB.TV is great to have.