Well this sort of makes my new Apple TV useless. I love using my ATV for Netflix, it is actually one of the reasons I like it. I love the face that it is portable, and I can carry my Netflix anywhere, but now my iPhone can too.
Netflix just updated their application to support Video Out. That means you can hook your device up to your TV with the help of some special AV cables. These AV cables can be bought at Apple or go find some third party ones out there. Afterwards, you can plug in your iPhone or iPod Touch, fire up the Netflix app, and watch some great, cheap, streaming.
Editors Note: Netflix is one of the greatest app investments I've made.
Download Netflix: Netflix for iPhone, iPod touch, and iPad on the iTunes App Store