First the good news: The Netflix App now supports video out.
The bad news? Those of you with anything other than the iPhone 4 and iPod Touch 4G are out of luck.
This may seem like a bad thing, but keep in mind that you may have a great Netflix-enabled device in your living room right now. Some of the most popular consumer electronics are all capable of playing back streaming video on your TV: the Wii, the PlayStation 3 and the Xbox 360 as well as many of the set-top boxes currently available. The plus side is that they aren’t limited by their battery life and most of those will output in HD. Something neither the iPod Touch nor the iPhone 4 can do (That is with video out to your TV).
Either way, if your iPhone or iPod Touch is your set-top box for now, have a look at the updated App here: Netflix