While "free legal movie downloads" might seem like an oxymoron, there are a few sites that offer free and legal streaming and downloads, according to Money Talks News. Both MoviesFoundOnline.com and Popcornflix offer streaming services as well as downloading options, though their selections are limited.
Streaming movies are easier to find in a wider selection. Crackle.com offers a decent selection of movies and TV shows for free, while Hulu.com does the same on a free-trial basis. Both, however, include ads with their streams. Open Culture offers links to a variety of classic movies, as does Archive.org, notes CCM.net. The Online Video Guide has a selection of relatively current movies, though mainly of the direct-to-video variety.