I spent quite a bit of my professional career dealing with this, largely from the rights enforcement standpoint, but that's a whole other story and a good one that goes back to the mid-90's insofar as the Internet is concerned.
As to watching movies on something like an iPad, I was surprised by how engaging it is. You look at a relatively small screen and think, how can that compare to 'home theatre'? But, late at night, using a source like Vudu, or Amazon Instant or Netflix, with a modest set of headphones, I can prop myself up in bed, watch a movie or tv series (that's how I watched all the episodes of 'Lost') and it actually is quite involving. When your nose is little more than a foot from the screen, the relative impact changes dramatically.
