Netflix has 8.8 million paying subscribers. Apple has sold 88 million ipods, 50 million TV episodes and over 1.3 million movies. So yes many itunes users but not as many itunes paying users, so there is a ways to go.
If anything, I think people are going to keep their Netflix, rip the movie and watch it through their Appletv.
All this talk about Appletv, it has gotten me interested in getting an ipod.