Our netflix usage is 99.5% kids shows. Pretty much all the PBS cartoons are on there, NOVA Science now is on there, Thomas and Friends, Dora the Explorer etc. We use hundreds of GB every month streaming media and have no plans on going back to cable or satellite. My wife can get some of her shows via hulu at her desk, some of them on the TV and if she is patient she'll get a whole season at once on netflix.
That being said, we'd use even more bandwidth with Netflix if their on demand streaming selection didn't suck for more recent releases. I don't watch a ton of older movies and those I do want to watch over and over again I own on DVD or Bluray which I would prefer to use since the quality is better and there's never any buffering problems.
Not to mention that young kids will watch shows over and over and over again. When my daughter (now 11) was that age, we mostly used DVDs, but these days netflix would be a fabulous investment for meeting that need.
Beyond watching the same thing over and over again, his tastes will change suddenly. We've gone through a phase where he was into nothing but Toy Story, followed shortly by Cars, then back to Toy Story, then Thomas, and now back to Cars. We aren't purchasing nearly as many DVDs as I had anticipated because he's perfectly happy watching Hero of the Rails or Misty Island Rescue another time and both are streaming. By having a variety of kids shows available we are also saving quite a bit on disc replacement costs. He can work the PS3 but doesn't really get that touching the bottom of the $30 Bluray discs is not a good idea.