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Unfortunately the netflix 1.2.1 with no update check no longer works it seems. Everyone is getting messages that say "Cannot find this video for playback" or something like that. So, even if you hit cancel update, no luck. Its unfortunate. don't know if there will be a fix or not. 1.7 does not work well on my 8120
Go to www.apktops.com where you should be able to download Netflix v1.5.2, v1.6 or v1.7 I am running Android 2.3.3 on a Kyros 8125 and a Kyros 1126.
Netflix v1.7 is the current version, but many people have reported serious audio/video sync problems with this version. On my 8125 the sync mismatch is a small fraction of a second. v1.6 seems to run without problems.
The Kyros 1126 has serious sync problems with both v1.6 and v1.7 which appears to be work with an external HDMI video. the videos seem to load (slowly) but properly and run as long as I don't get a WiFi disconnect. I am also running Keep WiFi that solves this problem most of the time.
On the Kyros 1126, v1.5.2 runs well with good audio/video sync. There are two bugs I have found though. When running an external HDMI screen, the LCD screen on the tablet 'rips' and jitters, although the external video is fine. If I pause the video and back up both screens remain black (but with audio.) You can jump forward with normal output, and you can go back and forth as long as you don't pause. The problem can only be fixed by rebooting the tablet.
I'm moving to a Acer Iconia A500, running Android 3.2.1 (soon to be updated to Android 4.0.1) and can report Netflix runs without a hitch. In general, I'm happy with both Coby tablets, but the limitations of Android 2.3, limited access to Android market (whcih I ahve worked around somewhat) and the bugginess are annoying. Will probably sell one of the Coby tablets and keep the other.