Much like iTunes, they're selling TV shows as well as offering movies for purchase and rent. Unlike iTunes, it's a streaming rather than a download service. Fortunately, they've got a number of free videos which will give you a sense of the quality of the service (which requires Flash).
Frankly, I'm a big fan of Amazon MP3, so it's good to see Amazon getting into the video business as well to put a little more competitive pressure on iTunes. I'm doubtful, however, that it will really affect the iTunes juggernaut.