Netflix says they stream up to 5MB/s for their video quality, which looks great to me. Not as good as a blu-ray I'm sure, but still looks better than standard definition.
Bluray max bitrate is 54 Mb/s, but I've generally seen transcoding to 20-30 Mb/s have nearly the same quality.
I have (and love) Blu-ray, but as much for the sound as the picture. Blu-rays have incredible audio.