Via a discussion by Ezra Klein, Cogitamus figures out the comparison in cost between Netflix by mail and by broadband. Hint: It's still cheaper to send DVDs by mail than it is to download them. It's not that Netflix's Watch Instantly service is a bad idea (when Comcast lets it through, I quite like it), but it's not obviously less expensive than the physical alternative.
Nor is it necessarily that much more environmentally friendly, which is another counterintuitive result. I got curious about this recently--after getting the Kindle, I was surprised to see that I was still often ordering physical boxes from Amazon, either for books that aren't available digitally or other items like games and music. But from what I've been able to find googling around*, the carbon impact from shopping online (or shipping products a la Netflix) may be less severe than traditional shopping models. And the reason is simply that those deliveries are often folded in with mail trucks that will run anyway, or UPS trucks that take trips along planned routes.
The packaging, on the other hand, is not nearly so harmless. Online shopping obviously leaves behind a trail of cardboard boxes and plastic wrapping. Amazon at least uses relatively little packaging, probably in an attempt to save weight. But this can always get better, and those materials can often be recycled.
* Google is, as always, not a substitute for someone who actually knows what they are talking about. But hopefully I'm smart enough to filter out the wackos.