Hulu is an awesome service and a great alternative to bittorrent, especially since it's of comparable quality. I honestly don't mind the ads so much, especially since I know TV requires money to make and these fund the various projects out there. It's good for my hard drive free space too, since I don't want TV shows taking up space after I've watched them once.
Two suggestions for them:
1)Make Hulu videos downloadable through some kind of player like the BBC has. I commute on trains a lot and don't have mobile internet access, but would love to spend the time being entertained by TV.
2)Post entire seasons of various series. For instance, I recently began watching the Office and have worked my way through seasons 1 - 3, watched 5 on TV and am currently watching 6. I can't watch season 4 unless I rent/borrow it (which isn't a huge deal, but what's the big deal about posting old episodes anyways? Dvd sales aren't going to be profitable much longer, not they way they were a few years ago.)