Why not just hook your Mac or PC up to your Wide Screen TV and run netflix from that?
Using the iPad with a VGA out seems good for a presentation but not a home theater experience.
I use my Blu-Ray player to stream NetFlix movies. I think Netflix movie output is good when you are away from home and want to watch on something bigger than your iPad. I don't think the NetFlix app will replace your Blu-Ray player or Roku box.
I actually enjoy it for home theater. I have a 27" Mac I am not moving that thing anywhere. But I have wifi network and an external harddrive with like 250 movies on it. I can watch on my living room tv via my playstation 3 as a wifi server to see my comp files but I have been hoping for something for the bedroom tv. Now I have it. My Fiancee can no longer complain about having to watch movies in the living room late at night. Just hook up the ipad and use Airvideo or Netflix.
As others said you need to have a cord that connects for audio VGA cable is visual only, its a Comp. Monitor cable.