The best free and legal site for movies and TV shows is Hulu.com, a joint venture of NBC Universal and Fox (News Corp). Yes, the same companies hounding people for illegal file sharing.

They are trying Hulu as one way to move to the digital future.

In the USA, Hulu works very well. But outside the States, you need something on your computer that cloaks your actual location. I use Hotspot Shield.

It works perfectly.

Hulu.com has a small but growing play list. (Including the Daily Show.)