PQ = same as DVD. PQ will ultimately vary by the movie itself as well, just like everything else. The better looking titles do look good, but AFAIK, you cannot upscale like a DVD.
SQ = stereo only
You don't download, you stream live. Speed depends on your connection speed. I am able to stream without delay via wifi. It takes a minute or two to buffer up initially, but once streaming I have never experienced dropouts. You can fast forward with scene clips, pause exit and resume later, etc...
I didn't notice the icon, but they did say that you would soon be able to stream without the need for their disc. Previously, you had to insert the Netflix disc (free) that launched the interface to stream.