I do it all the time and it looks great. Most of the shows look about DVD quality and that's perfectly adequate (in my opinion) on a 37" TV.
One thing to note is that CBS's tv shows on their website look AWFUL - for example if you try to go fullscreen, it's usually offset down by about a quarter of the frame so you can't see the pause button, or the whole lower quarter of the show. Ugh. It drove me to TPB.
Thanks on both of those. I'm thinking about this as I barely watch TV anymore, with the exception of a few shows. (Fringe, House, Psych, and the kids watch some cartoon stuff).
I'm almost thinking that between renting stuff through iTunes, and being able to watch almost everything on line anymore, I might just get rid of cable altogether.
Mmm, this just got even more tempting. Can you say, last minute Christmas gift to myself, LOL.