The free prime selection still isn't great, but Netflix sucks for streaming too. Between the two of them, you'll have a nice selection of documentaries and older tv shows, which are good for me. But I subscribe to both. I'm not a prime member for the video though, and I wouldn't sign up for prime just based on the free streaming. It's just a nice bonus sometimes.
Amazon Instant Video itself is pretty good. We find ourselves renting movies from there more frequently than cable on demand. There are also a couple of TV series that I buy since they run current (the day after they air), are in HD and generally difficult to come by with Time Warner. Futurama is the best example I have.
We're getting very close to cutting out cable entirely, and just scaling back to voice and internet ($60/mo). We have Hulu Plus ($8/mo), Netflix Streaming-only ($8/mo) and Amazon Instant Video (some free, some paid). The plan would be to buy our Showtime and HBO shows that we like, although it takes a while for things to get there from HBO. We'd probably average out to under $80/mo, which is basically a $110 savings per month.
Live sports are still the issue, but my teams are all out of market so I can go with NHL Gamecenter and MLB.tv. NFL is a challenge either way since my team rarely plays on TV up here and there's no legit streaming option. So far, my solution has been to just not watch NFL football, and it's no big loss.
/tangent