- Netflix will only send you "high quality" (over 720p) streams on certain browsers (IE on windows, Safari on OSX, ???? on Linux) that support Encrypted Media Extensions.
- Netflix also auto-scales the quality they are sending based on their understanding of your connection.
- Also apparently they do per-title re-encoding passes.
This all combines, in my experience, to on average the worst streaming quality overall and also the most opaque. There are debug modes you can enable to see some of this, but generally it's very hard to tell what quality you are looking at and what is preventing you from getting a nicer quality. I also find that Netflix's "low profile" content (i.e. not max quality) looks bad - i.e. the 720p stream looks quite bad in addition to being low resolution.