If MS allows the Zune HD to stream your purchased movies using the Smooth Streaming IIS technology(Instant On) and the Zune's wireless connection, you could technically be carrying around your entire HD movie collection in your pocket without wasting any hard drive space, on the Zune or on your computer.
Hell, this isn't even limited to the Zune HD. MS is about to detach the Zune Marketplace from the Zune hardware, starting with the 360. This means that any device that can access the Zune Marketplace can effectively stream any of the movies you have purchased. Purchase movies from one centralized location and view them from any device that has access to the Marketplace. I think that is friggen brilliant. Cloud FTW here.
This is all conjecture that MS allows you to stream movies that you have purchased and not just rented movies. Not sure why they would not. I will research to see if that is the case.
