Okay, here goes:
1) You're not going to ship a DVD-quality film on a CD because a CD only stores 700 MB while a DVD stores 4.7 GB. There's a reason for that, too. Even with MPG4, it's not going to happen.
2) There's already Netflix, which sends you DVD's to rent, then you return them for the next one, etc. And it's unlimited.
3) Even though I can watch DVD's in my room, on my iMac, I choose not to the vast majority of the time because they're much more fun in the family room with the TV, comfortable futon, and, especially, 5.1 surround sound system. I doubt most DVD players can play MPG4, even if they can play MP3.
4) Quicksilver: Why didn't you want to charge a fixed rate for downloading a movie? Instead of paying by the MB, pay by the flick. Video rental stores don't charge you by the length of the film, they charge you only based on the film. How much the consumers watch is up to them. Hotels are the same with pay-per-view. Your ISP probably charges you to use the Internet for the month; how much you surf is up to you.
5) Don't love Apple Computers, love the Macintosh platform. Apple is not the best business in the world, and they have some very questionable business practices, but they make the best computer in the world. Okay, love what you want.