Before you can view HULU, you will have to port Flash to the chip.
Start here to catch up on current progress:
http://osflash.org/open_source_flash_projects

Compile and install on a Beagle-Board (beagleboard.org) and tell
us how well you can play HULU and HD DVDs.
The Beagle uses what might well be a representative example
of any netbook styled processor.

Anyway, the video shows a pretty simple demo. Can the chip handle “HD” flash video in order to render Hulu? Unproven. Can it play HD content off the disk? Unproven. Etc. We'll just have to take ARM's word for it. The fact that the iPhone and iPod touch still don't handle Flash video might give all of us pause, but of course this is a future part we're talking about, so who knows?

Personally, I'll take ARM's word for it. We'll see when stuff starts to come out. Does seem like a possibility though. I suspect if Apple does go down this path though that it will mean a “locked down” device though, more like an iPhone/iPod touch an an Apple laptop/desktop that can run any software you like.

The interesting thing is that they might integrate 3G, require a data plan, and subsidize the heck out of it.

It might be a good candidate for loading up an ARM distro on, but if they make it subsidized and tied to 3G, they might not let you. Then again, people hacked iPhones, so why not these?

Of course, all of this is nothing but pure speculation at this point.

First, Apple engineers are good thinking outside the box and maybe they're not first doing something, but they're first to do it the way it's meant to be. NETBOOKS need more battery life. Currently only top of the life netbooks with a 6 cell battery deliver +5h of work and that's the minimum battery a sub-3pounds device should have.

Using an ARM CPU would make this task something really easy. Now, combine this with an amazing OS based on Mac OS X and you'll have a device that may be underpowered compared to Atom netbooks but is able to do as much as these thanks to an optimized OS, without mentioning an AMAZING battery life.

Once explored a first reason from a technology perspective, let's look at an economical reason. An ARM processor costs at least 25 bucks less than an Atom chip; and a custom board should costs say, 5 less than an Atom board. Also, a smaller battery should shave some aditional cost. Based on the price of actual netbooks like the MSI Wind, the BOM of an Apple netbook should be around US$ 300. As is usual with the Apple tax, the rumored price of US$ 599 for an Apple netbook make sense, giving them a 85-90% profit.

So, an ARM powered Apple netbook makes a lot of sense to me.