According to MediaGuardian:
Amazon Prime costs £49 annually. The new combined package will be charged at £79, about £6.58 a month, making it 35% cheaper than subscribing to each service separately. Users who only want access to Prime Instant Video can continue to pay £5.99. The LoveFilm brand will continue to be used for the DVD by post rental business Amazon is continuing to run.No word yet on LoveFilm/Prime Instant Video appearing as an App on the VM TiVo yet, but it was rumoured last year and it may be that the two companies were waiting for this rebrand before sealing the deal.
If you have a Smart TV, games console or modern blu-ray player, chances are you have access to LoveFilm already on your main screen. I have it on my Sony blu-ray but was unimpressed with the picture quality when I looked at it a few years back - far inferior to Netflix from what I recall. The TV and film lineup though is pretty neat - have a look here.
For a recent assessment of what's the better service, those nice Trusted Reviews people did a comparison of the two last December. Well worth a read. Netflix vs Lovefilm Instant. By the look of this article (and the comments posted below it) Amazon is going to have to beef up the tech delivery to really compete with Netflix.