Netflix has different streams for different devices. Devices with hard drives, like the Xbox 360, Tivo HD models, and PS3 look notably better than blu-ray players from everything I've experienced and read. I assume this is because they can handle bigger streams, I don't know. The PS3 is the only device with 3.8Mbps streams in 1080, and the only device that streams 5.1 sound.
I'm a critical blu-ray guy - I've posted many a review in the PQ thread on AVS, and I like the quality of the HD PS3 streams for the most part. No, they are not BD quality, but they are the best all you can eat streaming quality out there.