Windows – Silverlight hardware-accelerated playback is greyed-out – How to enable it

Silverlight -- as of Silverlight 3:

Another new and notable feature of Silverlight 3 is support for hardware acceleration. In Silverlight 1 and 2, all rendering was done in software, which meant that the performance of complex animations and video playback depended heavily on the capabilities of the host PC. Silverlight 3, however, can take advantage of hardware GPUs. You can see this for yourself in Beta 1 and even measure the impact that it has on performance and CPU usage.

http://silverlight.net/getstarted/silverlight3/

Flash -- as of Flash Player 9 Update 3:

Another very exciting new feature in Flash Player 9 Update 3 is hardware scaling support for Flash Player—which lends itself perfectly to enhancing the video playback experience of HD video in full screen—especially when you consider the size of HD 1080p video (1920 x 1080). The new hardware acceleration was not built solely for the new H.264 video capabilities. It also helps with larger On2 VP6 video files and the display of SWF content in general.

http://www.adobe.com/devnet/flashplayer/articles/hd_video_flash_player_05.html

There is not a way to use Windows Media Player to directly play Netflix streams. Netflix uses custom DRM, which WMP is not able to understand. The "Watch Instantly Netflix" option just uses Internet Explorer running embedded in Windows Media Player.

That said, the likely reason for Windows Media Player to succed where other media players fail is that WMP will use hardware accelleration to reduce CPU use. Making sure you have up to date video card drivers, up to date Internet Explorer or other browser and an up to date copy of Flash and Silverlight will ensure you have the best chance of taking advantage of hardware accelleration.