Early impressions of Criterion on Hulu+:
The selection, of course, is the major appeal. Not every existing Criterion movie is on there yet, but a huge number are already, and then there are the many titles that they have never released. You can keep a running count of those exclusives here. (go to the last page for the latest updates). Another pleasant surprise is the inclusion of all the major Chaplin feature films, up through the sound era.
So what are the negatives? The Hulu+ interface on your HDTV (a Panasonic Viera was tested in this case) is nowhere near as user-friendly or informative as Netflix's interface—especially for cinephiles. You can create a queue on the Hulu+ Web site. It has various sorting options, including customizing the order, same as Netflix, but that does not translate over to the TV, which jumbles the queue in an order it favors and which cannot be changed. If you add a lot of movies, and want to watch in queue order, you're going to have to scroll through the entire queue on the TV to find them. The next problem is the Hulu+ TV interface does not list the director or the actors. Criterion famously said they were dumping Netflix in favor of Hulu+ because "In short, they get it." Well, they certainly don't get it if they don't list who directed the frigging film!
A final selling point given to us by Criterion was that Hulu+ would add special features, something Netflix was unwilling to do. This has been sporadic. Perhaps one example isn't fair, but along with uploading L'Enfance-nue (1968, Maurice Pialat), it would have been nice if they included his breakout short "L'amour existe" (1960), which is on the DVD. Although it is understandable that that they already have more content on there than any reasonable person could keep up with. The treasure trove aspect basically wins out.
There is one remaining problem. Even at the highest HD streaming speed, the visual experience can be less than stellar. Dark black-and-white films exhibit significant compression artifacts as pixelization in the darkest areas of the frame. If one has Netflix and may gain access to the DVD or rent the blu-ray somewhere (Netflix doesn't carry many Criterion blu-rays unfortunately), it doesn't appeal to sit through a high-profile, artistically significant film with some splotchy pixels dancing around behind the characters' heads just because the scene was shot at night. Bright, color films, however, look perfectly fine—as long as they don't have any night scenes! It's the same with Netflix. This is simply a drawback of the streaming experience in general. If you know a film is shot dark, rent the DVD, or better the blu-ray.
Criterion on Hulu+ is a great way to gain access to the world's biggest library of great art films, but there are a few drawbacks to endure. If you are a bloodthirsty shut-in who has oodles of time to put your exploration of art cinema into overdrive, this is the deal for you. You don't need to wait for any discs, just keep clicking play, watching one film after another all weekend long. But if you are a high-minded snob who has come to enjoy not just the films but the award-winning visual quality of the Criterion Collection, you may find yourself preferring to wait for the discs, especially if your viewing habits are down to only one film a week.
UPDATE 10/28/11: Some other problems worthy of mention:
If you have Hulu+ on your TV, you're not going to watch online. So when you are online, it's usually browsing for things to add to your queue, but when you click a title for more info, it starts playing immediately. This makes for a very irritating shopping experience.
Any non-Criterion titles open a can of worms. 4x3 1.33 material, say an old TV show like Remington Steele or The X Files, displays incorrectly stretched to fill your 16x9 TV. Netflix does not screw this up.
There are commercials before and during every non-Criterion, non-Miramax movie/TV show. One may accept that on the newest episode of Glee, but on the 1999 British TV show Spaced? You would be better to rent the discs from Netflix. Miramax movies seem to be commercial-free, but other than that and Criterion you're facing commercials.