Apple's updated Terms of Service answers a few questions, but raises many more (some of which have already been posted to this discussion):
(xiv) Movie Rentals:
(aa) Movies are viewable only on your Mac or Windows computer (using iTunes 7.6 or later), iPhone, video-enabled iPod (iPod touch, iPod nano (3rd generation), or iPod classic), or on TVs using your Apple TV. Movies in high definition resolution (HD) are viewable only on TVs using your Apple TV and must be downloaded directly to your Apple TV. Movies are viewable only on one device at a time.
Ka-ching! The iTunes Store has always been about selling iPods (and now Apple TVs). My 5^th^ generation iPod won't cut it.
(bb) You must be connected to the Service when moving or streaming movies. Once a movie is moved, it is no longer viewable on the sending device. You may only move movies to another device from your Mac or Windows computer. Movies downloaded directly to your Apple TV may not be moved.
What's with the "moving or streaming"? It states that you have to transfer the rental before you can view it on another device, so there's no "streaming" going on.
The "must be connected to the Service" means that you won't be able to watch rentals on a laptop during a flight, for example.
It also appears that users have no way of viewing it in a different location (another Mac, Apple TV, or iPod) when it's downloaded directly to an Apple TV. Stupid, stupid, stupid.
(cc) You have thirty (30) days after downloading a movie to begin viewing. Once you begin viewing, you have twenty-four (24) hours to view the movie (the “Viewing Period”). You may view the movie an unlimited number of times during the Viewing Period. Movies are not viewable after the thirty (30) day period. Stopping, pausing or restarting a movie does not extend the available time for viewing.
(dd) If you move a movie to an iPod or iPhone and then use the Service to restore the iPod or iPhone before you finish watching it, the movie will be deleted and will not be recoverable. This also applies to choosing Settings > Reset > Erase all content and settings on iPod touch and iPhone.
So once it's moved to an iPod, can I move it back? (Actually, I can't... since I own a 5^th^ generation iPod.)
(ee) Broadband Internet connection required.
Duh!
Immediately after the rental section is the following:
(xv) HDMI. An HDCP connection is required in order to view movies (purchased or rented) and TV shows transmitted over HDMI.
This may be part of what's behind the HD-on-Apple-TV-only issue. With a computer and a DVI connection, you have means of digitally copying HD programming. Sure, you can do it with SD, but perhaps the studios put their foot down on HD.