Downloaded movies is only going to be viable if the quality is decent enough. I know know how many people would spend the vening watching a film on their PC, but I'd rather have it playing in the front room, displayed on a big TV and booming through decent speakers - instead of a monitor and PC speakers!
While a tv is much better, I have to admit money is a prime motivation in me not worrying about watching things on my PC. The way PC setups are going - quality surround sound toss in a 32" LCD screen it'll be right up there with most home theatre systems in a few years or surpassed it depending on the person - I still know people who use rabbit ears!
i haven't heard about this until i read this thread. it would be really exciting if we have something like this. i honestly find DVD's too costly. aaargh...