On Amazon.com you may purchase (to stream or download) a season's pass to a program, allowing you to download all existing episodes for the season and future as they arrive, paid for when available. A season pass in the banner-advert I saw worked out to US$1.89 per episode.
The files are in an unknown format (Windows DRM by the sound of it) and must be watched within the Amazon Unbox Video Player or on a Tivo, XBox or Windows Media PC.
None of this is any different to the online music debacle. They tired expensive tracks ($4 each). Failed. They tried DRM, it failed, and now they're leaning toward cheapish (US$0.99) MP3 downloads (see AmazonMP3 and eMusic.com). Australia takes it's sweet time catching up...
Based on that... Why don't they just skip ahead and build an online TV store selling shows for $1 in the local currency in the format the pirates use (DivX, XVid). Those that purchase a whole season get a discount on DVDs. They can even include an advert in it ("This episode of Heroes brought to you by Coke Zero! Be a hero! Drink ZERO!").
Wishful thinking.