Although this information doesn't appear to be very new, I only learned about it today from Joblo. The site is called Internet Archive and through it you can download movies and programs for which the copyright has expired, making them public domain.
From Internet Archive:
Watch full-length feature films, classic shorts, world culture documentaries, United States' WWII propaganda, movie trailers, or films created in just ten hours: These options are all featured in this diverse collection!
There are over seven hundred feature length films, which include the original Nosferatu, George Romero's Night of the Living Dead, The Phantom of the Opera (with Lon Chaney), Francis Ford Coppola's Dementia 13, Ed Wood's Plan 9 from Outer Space, and so many more classics for any movie geek to enjoy! Of course there is also the animation section, which holds some more classics, such as the Max Fleischer Superman cartoons (Nina's article on Fleischer is HERE).
Thanks again to Joblo for the news, and of course to the Internet Archive for existing!
Update: Oops, there is also another site for watching free movies, though I'm not sure if they are downloadable. Some of the films I listed above are on THIS SITE.

