Check my thread here on getting it to actually show up on the strip. Post #9.
Netflix in Windows Media Center
Peter, it allows us to log in with our user / pass, but we see the US selection of movies not the Canadian one. If we select a title it doesn't play, I am assuming because of geo locking. I thought of trying it with a VPN or something to see if it would let me play, but I just haven't had time to tinker with it. We also see all the disc borrowing stuff that is not available to us. That doesn't bother me too much if we would only see our Canadian titles. Hopefully other can chime in and add to this.
I was really hoping MS could fix this in time for Windows 7 SP1. That would be a nice treat for sure!!