i am new to this, but i have been watching stuff on http://www.hulu.com as cable is f'ing expensive! i also have a netflix account. yes, you do have to pay for it, but can stream movies to your computer as well as receive them in the mail.
If you find a site where you can watch movies for free with no login or subscription it is definitely illegal. That's not to say that they don't exist, but most of the popular ones were recently shut down by the US government.
Hulu has a huge library of shows and most of the big networks put their shows on there a week after airing on T.V., it is ad supported. Quicksilverscreen is a forum much like this one, you have to do some research to use the site but a little google time will help you out with that.
Netflix is $9 a month...unlimited number of movies can be downloaded, plus you can get CDs sent to your house, one sent to you, when you send it back and they receive it, the next goes out...and they pay all shipping....my wife and I love it.
Hulu is indeed legit, but it is pretty weak when it comes to movies. My guess is that the original poster has been watching ninjavideo.net or something similar, most of which were recently squashed by the feds and they were indeed illegal.
I agree with those saying pay the $9 for netflix. It's totally worth it if you have a good internet connection.