Netflix, the world's largest online movie rental service, today introduced a new feature that allows customers to immediately watch movies and television series on their PC.

Netflix is not offering movie downloads. They stream movies to subscribers to let them watch it right on their PCs.
Subscribers will continue to receive DVDs by mail from the company's market-leading catalog of over 70,000 titles and will have the additional option of instantly watching about 1,000 movies and TV series on their PCs at no additional cost. There is though a time limitation on how many hours you can watch movies online. The hours available for instant watching will vary based on subscribers' monthly plans. For example, subscribers on the entry-level $5.99 plan will have six hours of online movie watching per month and subscribers on Netflix's most popular plan, $17.99 for unlimited DVD rental and three discs out at a time, will have 18 hours of online movie watching per month.

Netflix is rolling out the instant movie feature to all subscribers over the next 6 month.
More details in this Netflix press-release. Hacking Netflix (Via Slashdot) has a video mockup of the Netflix watch now feature.