Like I've said before, I've been really impressed by Netflix streaming over the past year or so. It really has come a long way, if you've got the bandwidth. On PS3 (and now, other platforms), you can get HD and 5.1 surround on a number of shows - not all, but some. I think that the HD looks really good. On your PC, you can force it to buffer to the higher bitrates if your internet is slower.
Amazon Video on Demand has gotten better, too. They have HD and 5.1 on some shows now, too.
Hulu Plus looks really good, too, but I think they max out at 720p and stereo.