I would probably get Metal Gear Solid 4 if I were to get a PS3. Then my first movie would either be 300 or Watchmen. Both are visually amazing.
Yes, if you have a 360 you need a subscription to xbox live and netflix. If you get a PS3 you can buy
http://www.themediamall.com/playon/plugins for $50...which ends up being cheaper in the long run.
As for streaming quality, it depends on your internet speed.