Someone figured out how to watch Hulu in Canada, yay! Here are some instructions which worked for me. I use Windows 7 but these instructions should work and be very similar for Vista and XP.

You will need:

Mozilla Firefox
Modify Headers add-on
Microsoft Management Console (Included in Windows)

Step 1 - Install firefox and the Modify Headers add-on:

If you don't have Firefox installed yet, install it.
Install the Modify Headers add-on from above.

Step 2 - Configure Modify Headers:

1. In Firefox, click Tools and then Modify Headers.
2. At the top of the Modify Headers window is a little drop-down box. Select Add from that box.
3. In the first text field beside the drop-down, type "X-Forwarded-For" without quotation marks.
4. In the second text field, type "12.13.14.15" without quotation marks.
5. Leave the third text field empty and click Add to the right of it.
6. Click the Enable All button on the right.
7. Click the Configuration button and make sure "Always On: Enable modify headers when the window/tab is closed" unless you don't want to for some reason.

NOTE: This may interfere with other sites that you WANT thinking you're from Canada. You can always disable the rule in modify headers when not using Hulu.

Step 3 - Block tcp/udp ports Hulu uses within Microsoft Management Console. This seems like a lot of stuff but it's not too bad :P

Section A - Add an "IP Security Policies on Local Computer" snap-in to MMC

1. In Windows 7/Vista you can just click Start and type "mmc" minus quotes and hit Enter, but in XP you click Start > Run > type "mmc" minus quotes and hit enter.
2. Click File and then Add/Remove snap-in
3. Select "IP Security Policy Management" and click the Add button in the middle.
4. A wizard will pop up, leave it on "Local Computer" and click Finish.
5. Back in the Add/Remove snap-in window, click OK.

Section B - Create an IP Security Policy for Hulu

1. Back in the main MMC window, click to select "IP Security Policies on Local Computer"
2. Click Action at the top and then "Create IP Security Policy"
3.
In the wizard, click Next.
4. Create a name for the policy, I chose "Hulu IP Security Policy". Click Next.
5. Requests for secure communication? Whatevs, click Next.
6. Uncheck the edit box and click Finish.

Section C - Create an IP Filter List of tcp/udp ports you wish to block.

1. Back in the main MMC window, click to select "IP Security Policies on Local Computer" again.
2. Click Action at the top and then "Manage IP Filter Lists and Filter Actions"
3. Under the "Manage IP Filter Lists" tab, click Add.
4. Give the filter a name. I chose "Hulu TCP/UDP Block".
5. Click Add. When the "Welcome to IP Filter Wizard" comes up, click Next.
6. I didn't bother with a description...click Next.
7. For the source IP address, choose "Any IP Address" and click Next.
8. For the destination IP address, choose "Any IP Address" and click Next.
9. For protocol type, choose "TCP" and click Next.
10. Choose "To this port" and enter 1935 in the box and click Next.
11. Click Finish.
12. Back in the "IP Filter List" box you should have 1 IP filter for TCP port 1935.
13. Follow steps 5 to 11 once more, substituting UDP instead of TCP.
14. Back in the "IP Filter List" box you should have 2 IP filters for TCP and UDP on port 1935.
14. Click OK.

Section D - Add an IP Filter Action so MMC knows to block the above tcp/udp ports.

1. You should now be back in the "Manage IP Filter Lists and Filter Actions" window.
2. Click the "Manage Filter Actions" tab at the top and then click the Add button.
3. Welcome to the IP Security Filter Action Wizard, click Next.
4. Give the action a name, such as "Hulu Block" and click Next.
5. On the "Filter Action General Options" screen, select "Block" and click Next and then Finish.
6. Back in the "Manage IP Filter Lists and Filter Actions" click Apply and then OK.

Section E - Create an IP Security Rule combining the IP Filter List and IP Filter Action from above.

1. Back in the main MMC window, right click the new IP Security Policy and click Properties. (e.g. Hulu IP Security Policy from Section B.)
2. On the Rules tab, click Add.
3. Welcome to the Create IP Security Rule Wizard, click Next.
4. Leave the Tunnel Endpoint on "This rule does not specify a tunnel" and click Next.
5. For Network Type, select "All Network Connections" and click Next.
6. IP Filter List? Select "Hulu TCP/UDP Block" (put a dot in the little circle :P) and click Next.
7. Filter Action? Select "Hulu Block" just like above and click Next.
8. Click Finish.

Section F - Assign the Hulu IP Security Policy and try it out!

1. Back in the main MMC window, right click the "Hulu IP Security Policy" and click "Assign"
2. After closing Firefox and opening it again, I am able to use Hulu!

Conclusion:

It works! Thanks to Reddit user 200iso for making a post and MarshallX for providing more info that helped me. The first link below is to the main Reddit post and the second link contains instructions for setting up MMC (section's A through E above) from MarshallX. I just redid the MMC instructions to work better for me.

http://www.reddit.com/r/canada/comments/ckfcp/hulu_breakthrough_i_am_watching_hulu_in_canada/
http://www.scribd.com/doc/22398177/How-to-Block-TCP-UDP-Ports-Using-IPsec-in-Windows-Uma