While this was rumored at the beginning of the month, we now have official word from Microsoft on Hulu integration with Xbox Live. Available early next year, Hulu Plus will be available for a monthly fee of $9.99, and include full (current and past) seasons of several popular shows.
If you want early access to Hulu Plus, they are also accepting preview subscribers. To sign up, click here. It should be interesting to see how Hulu Plus competes/integrates with the Zune Marketplace.