So you can start watching a movie streaming via the PS3 in the living room, then as your eyes start to droop, head to the bedroom to watch the last half-hour on the Roku box you have in there, with no scrubbing back and forth to find the spot where you stopped.
Downsides? Well the fact that you need this disk is a downside. And one of the drawbacks of the service is that fast forwarding and rewinding is a bit odd. When you use one of these features instead of steady progression you see a series of keyframes. When you stop fast forwarding there's a few seconds pause before the show starts playing. This isn't specific to the PS3, it's just part of the Netflix service. Lastly, in the world of Playstation the circle button commonly is used as a "back up" button, and under Netflix, hitting circle exits you from the service. You need to hit left to go back, which is intuitive enough, but it'd be nice if circle duplicated the action of hitting left. Thankfully there's a prompt before exiting the service or this would be a lot more annoying than it is.
If you have a PS3 and Netflix, go to http://netflix.com/ps3 to order a disk; there's no reason not to. If you're on the fence about a PS3, Netflix Watch Now is just one more nice feature that comes with the system (keeping in mind it also comes with the Xbox 360). Either way, this is definitely a nice addition to the PS3's capabilities. You get unlimited streaming with a plan that costs less than $9/month; it's a great value.