I've been working there for years and hate sounding like a shill, so I'll keep the sell-talk to a minimum, yet try to share some info on the mechanics at a general level.
Services like Netflix and the ones Blockbuster and Walmart offer are not for everyone, but folks who are into the idea and get into finding DVDs to watch (remember that everyone carries television series on DVD as well as movies) usually get pretty stoked on it. I personally think of it as a really fun complement to cable & Tivo and the theater, but I wouldn't identify that or anything else I say as official company mantra.
Standard disclaimers apply, this is a conversation, not a contract.
It's true that shipping was erratic when we began the service -- actually, it was usually pretty good (we had been shipping discs as basic one-week rentals for a couple years before we created the subscription-based service) but delays were a lot more common. I don't work in the Ops group, but they have grown beyond belief over time and really are doing a great job. I remember when the "warehouse" was first built out next to my folding-card-table-desk; it was about the size of three or four basic office cubicles back in '98. Now, well, there's twenty-something distribution centers in addition to a gargantuan "mothership" in the south bay. I don't think I can say how much we ship in a day, but it's approximately a metric buttload. With that volume, sometimes there's going to be a hiccup on the shipment of a disc, but that's becoming far less common. Customer satisfaction is extremely high.
Most of the country usually gets one-day service nowadays. We can't promise that to everyone yet, but that's how it usually works out. Some areas do usually take two days (it's a big country, after all, and we can't control the postal service).
rzypvs, if your friend's in the sticks, it's still possible that he's in one-day coverage, but two may be more likely. He could have a different amount of turnaround, depending on the service he's with.
This is actually part of why we offer the free trial -- some folks are not into the turnaround time idea at first, but learn how to phase things to pretty much always have movies coming in. And some folks do just prefer to go to the store and get a movie, which is fine too. There's plenty of room in the market for everyone, really.
With the amount of refinement that's gone into our shipping, I really can't see how competitors can match our overall/aggregate shipping performance for some time. It's an extremely difficult problem to get good at (especially as your member base scales up) and there's no substitute for experience. *shrug* Individual stories may differ, but overall we're ahead in that game.
The trick to having a good experience with us (or any online DVD rental service) is to have a lot of movies in your Queue. If your top item isn't available when we ship, the next available one goes out. The most satisfied folks may keep their top picks at the top of the Queue, but have a bunch of fallback movies that they'd also be happy with in there as well.
Again, I've been here for years, so I've had my fill of evangelism and don't intend to pimp the business here, but thought it might be interesting for some of you to get some more concrete info. (Ack, most of this was written when most of the shipping reports in this thread were secondhand reports and rumors.) All of the online DVD rental services have happy customers.
Ours are just smarter and better-looking.
Bonus: We're building out a "friends" feature that's in a limited beta right now. Netflix members who are interested can PM me with the email address you use to log in at Netflix for an invite. It doesn't do much yet, but it's a fun feature.
250mL, keep in mind that it's the per-day late fees that they got rid of, but if you keep it past the one-week extra "grace period," you've just bought the movie or game. You can get a refund if you bring it back in 30 days, minus a $1.25 restocking fee. I would just hope that for-rent VHS tapes don't still cost $75+. (They did not long ago, no shit. I had to shell out $78 for "A Very Brady Sequel" just a few years ago thanks to my ex. Perhaps they don't cost that much now since DVDs are much cheaper.) OK, NOW I'm done whoring.
There are some times when the disk has arrived broken or scratched making it unplayable. And more often than not, I have to clean the things to make them work. BUT, so what? I don't have TV and renting movies is a complete ripoff when compared to a Nexflix subcription. Your friend will thank you. 
