This error happens if you try to stream movies on your PC from Netflix.com. This error only occurs after you have updated to Microsoft SilverLight 4. It might also have something to do with running the 64bit version of Windows 7.
rename file “mspr.hds” to anything you want. I just add a “1″ at the end like so…. mspr1.hds
Start Netflix again and you should be ok.