I rented several movies and have watched one on the rMini and then I have used AirPlay (with AppleTV) to play others on the TV in my bedroom and my living room. Works very well for both options. I didn't find the screen too small to watch movies at all. Seems just about perfect - great combo of smaller size that makes it easier to tote with you, but offers a large enough screen to be great for movies, games, web browsing, etc.
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Also, if you are planning to rent/buy/store movies on the rMini, I would recommend getting the 32gb or 64gb.
I originally got the 16gb assuming it would be plenty of space since I wouldn't be taking photos with the iPad (take tons and tons of photos/videos on my iPhone), but after the OS, it knocked it down to 13gb of free space, and then after downloading the apps I use (which weren't a ton of apps, either), I only had space for ONE HD movie. I was shocked! I really assumed I would be able to store at least 3-4 on there, but clearly I was wrong.
Needless to say, I returned the 16gb and got a 32gb instead. It allowed me to download all the apps I wanted, and also have around 5 movies on the iPad at a time. If you want to store music, photos, or more than a few movies, I'd opt for the 64gb.