Now that Hulu.com is out of beta I went to check it out. I have to say it's pretty nice. Over my lunch hour I watched a Simpsons episode that I had missed. I know I could have gone to Fox.com and done the same thing but the Hulu page loaded faster and was easier to just click and watch. The Fox on-demand system is strong but not as user friendly. That'll be an important factor. I also liked the lack of commercials within the show. There was a banner add for TacoBell above the player but it was fine. I didn't watch in full screen mode, so perhaps there the commercial would have interrupted the show. Regardless, it really worked well for me.
They will have to increase the number of shows and get the popular ones on there. Though it was nice to see some old shows on there like the Addams Family and The Incredible Hulk (rad-berries!). I'm sure the line-up will fill out over time. Profit sharing and existing contracts will have to be worked out for some shows, but if Hulu is successful, and it has potential, it could be a nice one stop for programming.
Aside from the limited shows I would also love to see some kind of download to your media player functionality, but I think that'll come eventually. Maybe an all you can eat subscription service, or something along those lines. The draw-back would be having to figure out all the damn DRM (oh how I loath you!).
Time will tell, but I'm pleased with what I've seen so far.