I'm actually peripherally involved in this technology, and what Moviebeam is doing has already been up and running for years...on the ANALOG broadcast signal of your local PBS station (most of them, at least - there is no requirement from PBS that anyone HAS to pass this stuff.) The new twist here is that now they want to use part of the DIGITAL broadcast signal, which is inherently more efficient, up to 19Mb/sec if the station wants to hand over their entire bandwidth. (And in the overnight hours, that's actually not entirely out of the question.)

Of course, if any of you actually own an HDTV with an ATSC tuner (ha-ha - I know that even in this geeky crowd fewer than 5% of you do) you'd know that 19Mb/sec is barely enough bandwidth to deliver good 1080I HD, not to mention subdividing that 19Mb into one hi-def and two standard-def streams (which yields three crappy-looking channels) and reserving space for other services, including educational datacasting, Moviebeam, the new version of the Emergency Alert System, and whatever else the brainiacs in DC can imagine to waste the bandwidth on.

So, to directly address the question, the movies can be at any quality level they want them to be at, from 1080P to postage stamp - it's only 1's and 0's, after all. So it's up to the playback hardware in the Moviebeam box to determine how good the stuff is supposed to look.