I actually started to reply this morning and got distracted.
In my opinion, download us superior to streaming. My reasons for this have to do primarily with bitrate. If you only have a 3MB connection, there's no way you're going to be able to stream true high definition content.
With download, or "play while downloading" as VUDU has, you can get much better quality, and at much higher bitrates. The only downside is that you may have a short delay before you can begin playing your movie, depending on your sustainable connection speed.
I would highly recommend VUDU, even though it requires an additional box. It just so happens that the VUDU comes out of the box with RF support, so there's no need to have it in your rack. Wherever you decide to place it though, ensure that it is ventilated like any other piece of equipment, as it does get warm.
If you're interested in additional details, here are a few pieces I've written in the past year or so dealing with Internet HD Video options:
A Comparison of Movie Download Services
Showdown: Apple TV vs. VUDU
Hope that helps,
- Shane
I want to download and/or stream 1080P HD to my HTPC. I have HDMI from my HTPC to my home theater to 50" Plasma. I really don't want to add VUDU Box if I can use my HTPC as the same fuction. HULU is great, even at 480P Hi RES on my plasma. I also have DirectTV on demand, connected via CAT6 to home network, for download; which is OK, but not up to snuff yet. Can I stream from VUDU without the box or am I going to add another peice to home theater & get the VUDU Box? 