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My friend runs a really powerful computer (512 Mb video card, 3 gigs of ram, good processor) with a wireless keyboard + mouse.
It's hooked up to his home theater and 41 inch Samsung TV. It runs hulu in high definition in full screen, and the image looks amazing, especially for Flash video.
You can also stream all the Netflix stuff, however I think it's IE only.
But don't underestimate a a good PC in your TV entertainment rack. I played left 4 dead on that thing, full res, high settings, surround sound, and it doesn't get much better than that.
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