Yeah I won't be dropping it, my plan (1 at a time, unlimited) was only increased by $1 and I find myself watching more instant streaming through my Wii anyway. I haven't noticed poor quality on the instant streaming, but I'm usually watching older movies or TV shows that way, so I'm not expecting them to be top notch quality anyway. But hey, I still watch VHS without any qualms, so what do I know.
That really sucks that you've had so many problems, it really must be your distribution center or something. In the almost 5 years I've had Netflix I've only received 2 broken/scratched discs, and the replacement came the next day. And I really can't think of any other issue I've had. Heck I just turned a disc into my mailbox yesterday at 6 PM and they already received it at 6 AM this morning! Impressive.