Several users have reported an issue in which Netflix online streaming does not work properly in Internet Explorer 8 under various versions of Windows, or under Windows 7 in various browsers (including Internet Explorer 8). In some cases streaming works, but screensavers are not automatically disabled, the stream incorrectly uses low bandwidth, or other functionality is missing. In other cases, streaming does not work at all.
Try compatibility mode In the IE 8 toolbar, click on the small icon that looks like a page broken in half, next to the refresh button (pictured below). This invokes “Compatibility View,” which can fix the Netflix issue.
If the issue persists and you would like to downgrade to Internet Explorer 7, follow the instructions in this Microsoft Knowledge Base article.
Use the beta Netflix player The Netflix beta player, which is based on Silverlight, works better under Windows 7 for a number of users.