This page explains many of netflix's limitations well: http://harry.hchen1.com/2006/10/03/391. But more importantly, look at these limitations in light of how the discovery engine is organizing its preference data and how it's collecting preference data.

The critical difference with the discovery engine is the idea of a group of content that users fill themselves with content based on criteria they see as relevant. Yes, a users aggregate preference composition is important, but what is more important is their set of preferences regarding a specific collection of content. This way, a user can be really into classical music, horror movies, and modern furniture, and get relevant recommendations for each interest, connecting with people who are most in the know regarding each interest.