This has been discussed more than a few times since we first found out the Google Videos App would not allow rooted users to watch rental movies on their devices. For more details on that you can check this story out. Just yesterday Google updated the video app to allow streaming and playback of rented movies on FroYo and Gingerbread devices too. We have good news for those rooted users though.
The developers over at SDX have been hard at work, we can now use a modded version of the app where they have removed the root check so all devices will be able to enjoy movie playback. This version should also work with all supported devices running Android 2.2 and above so those on older Android are also in luck.
As always make sure to backup or save the previous version just to be safe, otherwise uninstall and install the new modded APK and you are good to go. For the few not wanting to use the modded APK and have rooted devices and rented movies didn't play, you can also go to the YouTube app and watch them through "rentals" in YouTube as Google has yet to implement the root check into it -- just a tip! Head on to the source for more details.