This new version of the Android Market, give you new ways to find great applications and games, purchase books, and movie rentals. The update is for the Android 2.2 Froyo devices or higher.+
The rental movie update is only available for the US, you’ll be able to rent thousands of movies, starting at $1.99, right from Android Market on your phone. The Videos application, available in Android Market, there’s no more waiting for downloads, syncing, or worrying about storage space. Just simply sign into Android Market with your Google account, and then you can rent movies.
Source: Google Mobile Blog