Streaming movies on Netflix a frugal alternative to cable TV

My household recently got a free disc from Netflix to instantly watch movies on our Nintendo Wii console, allowing us to stream movies onto our TV instead of waiting for a DVD to arrive in the mail. My wife and I haven't yet been acting like kids in a candy store with the additional movies, but some slow weekend I expect we'll get more than our money's worth from our one-DVD-out-at-a-time membership. We're already streaming enough movies that our cost per movie from Netflix has dropped in half.

This led me to wonder how much money we're saving when all of the variables are factored in: the cost of the Wii, the cost of the Netflix subscription and how much the relative cost of a movie drops with each movie watched instantly, the savings from movies not bought or seen at the theater because of the service, and the savings from not renting movies from Blockbuster or elsewhere that can be watched instantly on Netflix.