Jim did you guys do something with the latest build?
I added Netflix to my start menu as a customizable item and it took me to my account, selected (with my remote) the video I wanted and then all I needed to do was go through the standard "Accept" and "Play" to start my movie.
The movie plays as an overlay as best as I can tell as I could not get a screen shot of the video playing. It does in fact play in both partial screen and full screen. Quality is exactly the same.
What does not work though is fast forwarding or rewarding.