Taking a page from Netflix, Apple, and Amazon, Google today launched a movie rental service at Google I/O. There are thousands of movies available at launch and each can be accessed through the Android Market's website. The rentals will range in price from $1.99 to $3.99 and are currently available for viewing on the Motorola Xoom tablet or through YouTube in your browser. Support for Android smartphones and other tablets running Android 2.2 (Froyo) or later is coming in a few weeks.
The films are available in high-definition-- even on your phone-- and will download in the background, so you'll be able to watch them regardless of whether or not you have an Internet connection. Rentals will be available for 30 days after you purchase them, but once you start watching a film, you'll only have 24 hours to watch it from start to finish, which is typical for online movie rental services.
An update is rolling out to Xoom users today, and it's already available to desktop users at https://market.android.com/movies. We'll be watching for when it's available on smartphones and other tablets.