On Netflix: I would recommend a regular netflix membership and rent movies in the mail on blu-ray if you care about surround sound. If you have an HDTV w/ surround sound get a PS3 for blu-ray. If you don't care about surround sound go for netflix w/ 360. Movies you download or watch online from Netflix only have 2 channel stereo audio.
On Gaming: You'll need the current 80GB ($499) if you really care about backwards compatibility, plus you can get a free game included with the Metal Gear Solid 4 bundle and if you don't want it sell it for a game you do. They are currently in stock at Amazon.com for the same price and you can get free shipping and pay no tax from Amazon unless you live in NY (0.07% sales tax).
If you get the current Elite 360 for ($450 + $50 live) it's going to be the same cost to get started. Unless you wait until early September then the Elite has a price drop to $399 so you'd save an extra $50 for another game or controller. Nobody knows when PS3 will have it's next price drop.
