A partnership was announced over four years ago between online DVD rental service Netflix and digital video recorder manufacturer TiVo, but only now are its fruits beginning to show. Netflix has a streaming movie feature called Watch Instantly, which will now be available through TiVo’s set-top boxes (only the ones which are HD Compatible).

The service will be made available in an initial testing phase on Thursday, and will be available to all owners of TiVo owners in December. If the TiVo customers also have a Netflix unlimited subscription plan (priced starting at $8.99/month) there will be no additional charge for the new feature.

Netflix, which is based in Los Gatos, CA, is better known for their rent-by-mail DVD subscription services. It has been expanding recently into the digital avenue, and it currently offers a database of 12,000 movies for subscribers to stream and view over the web with no extra charge.

TiVo, of Alviso, CA, sees the partnership as an opportunity to further extend their offering of internet-based content. For a long while, TiVo customers have been able to rent and buy films and TV show episodes through Amazon.com, Walt Disney Studios and Jaman.com, as well as view clips from YouTube.com, directly on their TV set.

TiVo is also in the business of selling the TiVo software to other cable and satellite providers who offer no-name, low-price DVR boxes to customers. And considering the precedent-setting win in the lawsuit against DISH, there’s little that’s stopping TiVo from getting other cable and satellite operators into the fold.

By the way, the Netflix streaming video service will not be available to customers who get the TiVo service on DVR hardware by partners like DirectTV or Comcast. This is because TiVo intend internet deals like the one with Netflix will help it sell more of its own devices, which have a limited market share in the DVR field.

“For us this is very much aimed at new customers,” said TiVo chief executive Tom Rogers in a statement. “There are nine million Netflix subscribers out there who are movie lovers and who want something that really adds juice to their overall television experience.”

TiVo, however, is only one of the directions Netflix, who has been doing a bit of expanding of its own, is heading to. In the previous year, the company’s Watch Instantly service has been signed on to be delivered to LG Electronics and Samsung Electronics Blu-ray DVD players, as well as to subscribers of the Microsoft Xbox Live Internet gaming service. Netflix is also an investor in Roku, a set-top box manufacturer startup, which makes $99 devices, and which also delivers Netflix’s service to television sets.

The journey hasn’t been without troubles though, as Netflix has felt the sting of the economic recession as well, with stocks dropping. Also of note, is that the current deal is actually the second attempt the two companies have tried to implement Internet film delivery. The previous one, to which the initial partnership referred to, was bogged down by licensing and technology issues and never came into fruition.