I haven’t played around with Understudy much (it isn’t really all that good) but I have streamed some Hulu content through it. My experiences haven’t been too positive after adding a feed to Understudy I received errors and had to quit Front Row. After reopening Front Row the feed that I added (which was the Family Guy show feed) was still there but was named “Hulu Feed,” I could rename it but I probably shouldn’t need to. The video streamed fine but it wasn’t exactly full screen, there were black bars across the top and bottom, which isn’t ideal.
I didn’t spend any time with Netflix content but 9 to 5 Mac confirms that the streaming does work but you have to be logged into Netflix through Safari.
The fact is that if you want a simple 10 foot interface for watching Hulu and Netflix content this is a great option, especially if you already have a Mac Mini contected to an HDTV or if you have an iMac in your bedroom. But, it will take a while to set up and won’t give you the best experience, but since (from what I’ve seen out there) every other option involves either a special box (like the Roku Netflix streaming box) or a pay per episode system (like with iTunes) Understudy might be your best bet if you don’t want to drop a lot of cash.