Although Microsoft dodged this exact question every single time we asked it (and oh, we asked multiple times
) – and temporarily dropped other, already confirmed features like movie sharing
– the New Xbox Experience's Netflix app will indeed stream HD content, if your connection can handle it. Interesting thing is, this is exclusive to the Xbox 360 for now: the various Netflix-enabled devices don't; Netflix's own "Watch Instantly" portal doesn't!
Engadget took an episode of Heroes in HD for a spin and reported that "the quality was stunning." There's only about 300 titles (and some of those are Heroes episodes, so you'll probably want to subtract those) but make no mistake: HD streaming is one of the strongest reasons yet to become a Netflix subscriber if you aren't already.