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There are several options in downloading and/or watching movies online. From the beginning, like music downloading, downloading movies online usually meant doing something illegal. Currently, there are several places to download or watch movies online. The illegal options are still available, keep in mind, but the legal movie sites are picking up steam. This information will focus on the legal websites to watch full movies online and/or download movies.
There are a variety of options around. Each site offers their own pricing model, selection, movie formats, and user experience.
There are actually 2 main pricing models that the online movie download sites use - monthly subscriptions and per download pricing.
Sites which provide monthly subscriptions give unlimited downloads, for a flat monthly cost. CinemaNow, Netflix, and Vongo operate under this model.
The other major pricing model, per download pricing, is precisely what it sounds like. There will be a fee for each movie download. Amazon Unbox and iTunes operate this way.
Unless you are not planning on watching very many movies in a month, the flat monthly fee will be the way to go. Additionally there are some movies which are readily available for free from each of the services and various free trials are available to try them out.
The selection varies from service to service. New releases are hit or miss. Movies appear to be available on DVD as well as for rental ahead of being available for download. CinemaNow seems to get the films more quickly than the others. iTunes selection is the most limited of the major services.
The predominant file format for the download services is Windows Media Video files (.WMV). iTunes will be the obvious exception, which offers files as MPEG-4s.
Each service requires you to download their software as a way to download and watch movies. Each interface is unique, but its really a matter of personal preference. Vongo and CinemaNow each have good interfaces.