Here's an article from MacWorld UK on a reason why there are no movies to download from iTunes just yet:

Apple's director of QuickTime Product Marketing, Frank Casanova, told Technology Review that this is 'one of the reasons why there's no activity taking place in movie downloads'.

With a 1.5GB movie file 'you could request a movie from Netflix [which delivers DVDs by mail] before this download gets to you,' he explains.

I believe what that tells us is that the movie producers, for some reason, don't want to let out movies unless they have pretty high picture quality. Certainly they could release movies that are relatively pixelated at higher resolutions that download quickly, and to me that would help keep the iTunes movies from competing with DVD, much less something like BluRay, the technology that brings you The Fifth Element for just $25!

The second take-home is that this tells us the number of pirates out there swapping movies at qualities the movie industry cares about are so small to be not worth pursuing commercially. If we refuse to sell them to people who are spending the time & bandwidth, well, can that really be all that large a slice of the pie?

I guess the solution is better compression and slightly relaxed quality standards from movie co's. Either that or it's all a smokescreen to help Apple save face that says the industry won't deal. All too often technical excuses of relatively trivial, even irrational small problems are used to cover a political/cultural issue.