I would also love this option. Movies and TV are different than music. There is a reason you don't see music rental places. I've mentioned it before in previous posts, but how cool would it be to be able to rent movies/tv episodes from your couch through iTV or Front Row? Maybe renting movies would cannibalize movie purchases though. Who cares! (except the movie studios...) I would think the increase in renting would equal out to the same as just purchasing since more people would be willing to rent.
Count me for another "would subscribe to a video subscription plan". As the iTMS movie library grows it could replace Netflix for me, if they start offering anamorphic widescreen content. The TV show catalog is already enough that I would probably get a subscription plan for it.
I assume, though, they'd have to limit it somehow, otherwise they would probably lose money... Unlike the traditional video/DVD rental business, the cost per "rental" is the same as a sale for Apple (they have to host and transmit the same file either way whereas the same DVD can be rented out several times with little or no additional cost) but a rental implies that you get some sort of discount.
I think the best plan would be to sell a fairly cheap service, say $10 per month or so, that included 4 movie "rentals" per month, and also gave you certain discount rates on TV show purchases. Maybe a couple free episodes per month, and then $1 off TV purchases after that, plus steeper discounts for buying complete seasons.
There's no way for Apple to compete with cable TV + decent DVR in selection for the price (cable $33 + tivo $13 per month and I get a massive selection of programing and the ability to watch it on demand and transfer it to my iPod, a DVD, etc), or Netflix for movies for that matter. Their best bet, imo, is to offer something that is a nice companion to regular TV/DVR/rental services that is priced really well for impulse buys, at least until they have a larger library and can push bandwidth and licensing costs down to where they can compete.