This is my wish as well. Hopefully won't take someone too long to pull off.
We'll see, but it seems promising.
The specs for Silverlight—if that's what Netflix is using—require a 800mhz G4 or a 1.83 Ghz Core duo processor. The Apple TV has a 1Ghz Pentium M processor—which is based on the Core Duo. Whether that's enough for Silverlight remains to be seen but I think they only mention 1.83 since that's the specs of the first available Intel Mac Mini. The 1Ghz Pentium M is on par with—if it doesn't surpass in the first place—the G4's minimum spec. (A potential issue might be SSE3 though...)
NetFlix video tops off at 480p so there should be no problem there either. If it was (near) HD, we might have to worry a bit since Apple uses the video card to support HD.