YouTube has announced it has partnered with Universal Pictures, Sony Pictures, Warner Brothers, Lionsgate Films, Starz, The Weinstein Company, and Magnolia Pictures, among others, to offer 3,000 new and catalog releases for rent. Most new releases start at $3.99 and library videos start at $2.99 and are viewable via PC or Google TV.
For most movies, viewers will have 30 days to begin watching their rental, and once they start watching the movie they will typically have 24 hours to finish.
Interestingly, you can embed movies on other sites. If a user who has not rented the movie views the embedded video, the embedded player will show the movie's trailer along with an overlay that users can click on to rent the full movie. (Let's see if it works below..)
As to quality, in their press release YouTube says that they support video in up to 4k resolution, however, "it is up to our partners to specify what video quality they provide." They go on to note that most movies will be in standard definition.
[Well, it appears I did something wrong, as I managed to embed the trailer, but there's no "Rent Me" button appearing...]