The new PS3 firmware has an iPlayer client with fullscreen support. It’s not quite broadcast SD quality, never mind HD, but that’s a fairly straightforward problem to resolve and sitting using it last night I couldn’t help but think that this is exactly how TV should work. Full TV screen, on demand and a good UI.
It’d be nice if it were free software (but again, not the most complex problem). More of an issue are the political and licensing issues that mean it’s BBC only for the forseeable future.