I have streamed lots and lots of movies on netflix, I think because I'm more willing to see a movie I care a little less about when I can get at it instantly rather than taking up a dvd slot with it... plus they have some great stuff available.
I'm streaming on an xbox360, wirelessly on a different floor, and I get no issues whatsoever. no slowdown, complete smoothness, everything looks at worst decent and at best very good.