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I love Hulu's player and the site interface is great. Video quality is great. Ad length is tolerable, especially since you can just click around another site while it's playing. I watched all of Sunny In Philladelphia and Kitchen Confidential on it.
But then I want the watch The Soup and all you get is clips... I'm guessing this has to do with certain shows having contracts with other sites like Yahoo and/or restrictive broadcasting rights or something.
TV on the tube will always have a leg up on the web because all the shit on the web is usually a day late. It's for people that don't have DVR's and wouldn't be watching the shows if they had to be in front of the TV at specific times. Plus it's not much fun to have friends over to watch the newest episode of your favorite show on a computer the day after it originally aired.
The web will always have the advantage of convenience, variety, customization and probably gets viewed by billions of more people per day.