Oh, that Boxee lot is a crafty bunch. The open-source media center today added Netflix capabilities, allowing you to browse the titles available for streaming, manage your Watch Instantly queue and stream movies directly to your TV.

The new functionality was built using the Netflix APIs and is part of a new alpha version of Boxee. One nice bonus is that unlike other Netflix services such as the Roku and Xbox, Boxee lets you browse and add streaming titles directly from the TV. There’s no need to separately fill your queue on a computer.

However, the Netflix feature only lets you browse and manage streaming titles, not the regular DVD-by-mail ones. And in Boxee’s ongoing it-works-now-it-doesn’t-now-it’s-back tug-of-war with Apple, the Netflix function does not currently run on the Apple TV hardware (because of a Silverlight issue). A spokesperson for the company says getting Netflix up and running on the Apple TV this is their top priority.

In addition to Netflix, this Boxee update also includes access to new content from TheWB.com and new interfaces for CNN, Hulu and YouTube content. Additionally, the service now links music videos from MTVMusic.com to match artists and songs in your audio library.

Adding Netflix should provide a nice new incentive for people to try out the service, but it’s still too technical for mainstream adoption. Granted, it’s still only in alpha, so that can be forgiven. The company just raised $4 million, now it needs to get built into some consumer hardware to see if it can take off.

For more screenshots of Netflix on Boxee, visit our sister publication, The Apple Blog.