I recently purchased the Blockbuster OnDemand set top box called MediaPoint. Made by 2Wire, it costs $99 for the hardware, and it comes with 25 complimentary rentals, so it's a relative wash if one views all 25 movies. This service competes with the traditional Pay Per View rental services from cable/DBS providers like Comcast & DirecTV, and with the Netflix streaming subscription service offered through a Roku box, LG DVD player and now through the XBox 360.
The box is good-looking, compact, has all the necessary AV plugs for almost any type of video (HDMI, composite, component), and also has a USB slot and memory slot for future expansion options. It comes with a simple AV cable, remote control and power cord.
The set-up of Media Point should be really easy - the software is simple to understand, it's a quick process to activate the box by inputting a PIN code into the web site, and it can mostly be done using the small remote control. However, in my case, the box simply didn't recognize my WiFi signal, no matter where I placed the box, and the power cord itself is too large to easily plug into other powered components, so I had to find a separate outlet, for which the power cord was too short to reach.
Once we worked out those issues by plugging it into an Ethernet port, the software worked well, providing a clean menu of options with a simple branching tree of genres, along with instructive graphics, the ability to preview a movie before renting it, and a set of lower priced $1.99 rentals, as well as the standard $3.99 ones.
In general, I like the service EXCEPT that simply put, the selection of movies SUCKS. This is not unique to Blockbuster, but Comcast at least has all the big recent movies available, and Netflix has a larger selection of movies and TV shows, so it doesn't seem so sparse. Blockbuster OnDemand has roughly 2,000 movies available, a lousy set of TV shows, and outside of what I would consider 5 mainstream hits like Iron Man, it's Most Popular category has almost nothing recognizable, even from a media junkie like me.
The service allows you to watch the movies pretty quickly after the progressive download begins, and the quality appears better than what I see from the Netflix streaming service, especially if a microwave or wireless phone gets turned on during the movie, so the quality seems pretty strong. If one is already a Netflix subscriber, even at the $8.99/month service, the Netflix service is a better deal since you're not paying per movie.
However, in my case, I have a Tahoe house with broadband, but not with cable/satellite service, and when we want to watch movies, it's painful to attach the laptop to the TV to use either Slingbox or some type of PC-oriented service. The Blockbuster OnDemand service has done a really nice job of providing an easy way to connect a video box to a TV, and to deliver possibly compelling content to users.
If BB can only improve the content offering, then BB will have a niche, but interesting video service, but the momentum in this category is still with the rapidly improving traditional Pay Per View and Netflix video services.
UPDATE: see subsequent OnDemand experience post here