How well is this executed? Mixed.
The concept is great. Watch TV whenever you want, from your computer or even your phone, and in HD. Their revenue comes the same way as broadcast TV - commercials. Sometimes there's one long (60 second) one at the beginning, but usually they are at the usual break points. Though there's usually only one 15-30 second commercial each break, not six.
They usually have the latest several episodes of new television series, though usually with a week delay. They have some movies, though in numbers that they're just a bonus, not a deciding factor.
But shows from networks other than the main companies (ABC, NBC, CBS, Fox, CW and their affiliates) are often not on Hulu. BBC America, for instance, doesn't have their content on Hulu; they offer it on iTunes instead, on a paid subscription basis releasing new shows as soon as they've aired. That means no Doctor Who, Torchwood, or Primeval.
Hulu offers a Hulu Desktop application that offers Media Center-style features and even works with Media Center remotes (on Windows) or Macintosh remotes. The menus are easier to navigate than through the webpage, and media suggestions are made and easy to use. For instance, after completing one episode of a television show, the next episode will be suggested.
The Hulu website allows searching for a specific series, and while series are not sub-categorized by season, searches can include this, such as "Babylon 5 season 2". Content is also listed by genre, referred to as Channels, such as "Science Fiction" or "Animation and Cartoons". While these groupings aren't perfect (Family Guy and Death Note are in the same group as Casper the Friendly Ghost and The Pink Panther), but it's better than nothing.
Searches can be difficult to narrow, including descriptions without a clear way to change this. Also, the TV shows and movies are intermixed. As an example of both issues, a search for "Alien Nation" turns up eight listings. Five of these are movies ("feature films"), two are TV show excerpts that refer to the "Alien Nation" series, and one is listed as a "full episode" titled "Retro Minute" that, as the name indicates, is only one minute long. While selectable filters by title are listed, each movie is listed separately (one episode each). No episodes of the "Alien Nation" TV show are currently available.
Content is often incomplete. For instance, Babylon 5 only has the first two seasons and none of the movies (the site says they have requested permission for more seasons). On the other hand, as I mentioned above, Alien Nation has five movies and no TV shows. Stargate SG1 only has the first three seasons and Stargate Atlantis only has the fifth season, though in their defense, these series are available on DVD. Smallville has five episodes from the fifth season (hosted at ABC Family), five episodes from the sixth season (hosted at The CB), and two episodes from the last season (hosted at CWTV).
The quality is also a little lower than I'd like, though better than YouTube. "Standard Resolution" is only 360 lines, not TV's standard definition of 480 lines. Going to "High Resolution" gets you up to SDTV 480 lines, but not the 1080i of HDTV. And programs are stereo even when the original was encoded with surround.
The biggest problem is broadcast quality due to streaming the programs. I have a 6Mb connection over fiber optic, a quality connection with high speed and low latency, but the stream still stutters. I have a Core 2 Duo computer with 4GB RAM, but the video is still not smooth. I can understand this some, considering they have to be experiencing great demand. But they need to give me the option of downloading the content so I am not tied to the Internet speed. And the video smoothness appears to be a problem in the media player interface, since at that point the video is already on my computer. This program in large part serves to insert the commercials which are not in the original video file.
There is a way around the problems, albeit one that requires a little patience. A program called Hulu Downloader allows downloading the Hulu programs. The standard version is free, and it does not have any spyware or ads (other than opening the home page on closing, if you're using the free version). But it does have some quirks; it sometimes crashes, it sometimes loses its connection to files and won't restart them, and the free version will only capture the standard-quality recordings, but that's a compromise for a free version. It's also a little slow, a little better than real-time. So, I simply start transferring the next few shows while watching one I already have. It also can only handle three files at a time; I just close and restart the program every three files.
Paid programs that also do the job are available, but the whole idea is that TV is supposed to be free. I have read reports of other programs that can transfer a recording in only a few minutes. These seem to run $30-60, but I haven't looked into recommendations too closely; I wanted free.
If I have one of the shows already on my computer, it plays fine. The video is smooth, unlike through the web page. The video is a standard FLV Flash format, and Media Player Classic plays it just fine. I like getting MPC from Codec Guide since they include all the codecs you might need (which tell the program how to handle odd file formats like Flash) as well as the latest version of Media Player Classic. I don't keep the files; I just watch them and delete them in standard DVR fashion.
Downloading the content does not pose any copyright issues as these programs are licensed for broadcast; courts have already held "time-shifting", recording programs now for playback later, to be legal, as long as the user has legal access to the live program. As a note, the downloaded file does not have any commercials. Ironically, when I download the file to avoid the quality problems of streaming video, Hulu also loses their revenue stream (no pun intended). I wouldn't mind the commercials, but Hulu decided to handle things that way.
Hulu usually has the latest several episodes of new television series. Basic cable would only have one show a week, so being able to catch up past weeks is just bonus. Just make sure Hulu carries the shows you are interested in before making any changes to your subscriptions.
Video quality when watching a stream is lower than I would prefer. If you're not as picky as I am, this might not be a problem. If this is a problem, you might want to get a downloader program, and you might want to consider paying the $30-60 they run.