Here is a quick guide to watching movies from the Internet. Note: Beware of pirated Hollywood movies, because you wouldn't want to watch blockbuster movies for free, or you might upset the MPAA!   ;)

Here is what you'll need:

A fast internet connection. Downloading movies over dial-up is no fun, trust me on this one.

A good file-sharing program. I recommend Kazaa-Lite. If you use the regular Kazaa, you'll be seeing lots of unwanted pop-up windows and other annoyances. Uninstall it, run Ad-Aware and then install Kazaa-Lite, which you can download here. For hard-to-find movies, try using Overnet (requires patience).

You need codecs to watch the movies that you download. This can get tricky, but if you download and install these four packages, you should be able to happily watch 98% of the movies out there.
(I recommend installing them in this order, and rebooting before installing ffdshow).
1) Nemo Codec Pack  
2) DivX  
3) Xvid  
4) ffdshow.

A good media player to watch the movies in.
(Windows Media Player can play most movies you'll find, and is now available for Mac and Linux as well as Windows. If your movie won't play in WMP, try opening it with the DivX Player that comes bundled with the DivX codec).

Someone to make popcorn. A microwave will work okay most of the time.