I am 100% positive that this is caused by a codec issue, and I'm pretty sure that it has to do with the order in which you install Silverlight and your video codecs. This has now happened to me twice on two different MCE builds, and it seems to happen when I install Silverlight AFTER I've installed my third party video codecs. Not sure about everyone else, but I generally only use two codecs on my Media Center PC: Haali Media Splitter and ffdshow. When I install them before installing Silverlight, I get the issue that everyone else is having (MCE freezes at the end of a Netflix streaming video). Here's how I just fixed the problem:
1) Uninstall Silverlight and any third party video codecs you've previously installed.
2) Reinstall the latest version of Silverlight.
3) Reinstall any other codecs you might use, ensuring that you are using the most up-to-date versions of each.
That did it for me! Furthermore, I believe that this might have something to do with a conflict between Silverlight and one of the third party codecs-- I say this because I've noticed that the behavior of my Netflix app changes after I install the other codecs. If you install ONLY Silverlight and play a video via the Netflix app, watch what happens when you hold down the fast forward button-- it scrolls through the timeline very quickly. Now, install Haali Media Splitter and ffdshow with their default settings and try it again. You will no longer be able to scroll through the timeline by holding down the button-- instead, you have to press the button over and over again to get it to advance. So I assume that one of these third party codecs takes over some of the Netflix streaming duties from Silverlight, and you can probably tinker with the settings for each one to ensure that this doesn't happen. In any event, I can all but guarantee that this is a codec issue, and if you uninstall all your codecs and make sure that Silverlight is installed FIRST, that will take care of the problem... unless you're using another codec that could cause a separate conflict, but in my opinion you don't need to use any other codecs other than Haali and ffdshow, so there's no reason to install anything other than those two.