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Although most big-name movies will cost money to download, you can download free, legal movies from a variety of sources, including:  Archive.org (archive.org/details/movies) - This is a large collection of films that are in the public domain and are free to watch for anyone. When downloading movies from this site, make sure to download the "h.246" version. YouTube's Free Movies selection (youtube.com/user/movies/videos?sort=dd&view=26&shelf_id=12) - This is a collection of movies that have been legally uploaded to YouTube to watch for free. If you want to download these for your iPad, you'll need to use a YouTube downloader. Click here for details. Classic Cinema Online (classiccinemaonline.com) - This site hosts lots of movies from the early days of motion pictures, and most can be downloaded for free. Select a movie and then click the "Download" button to download the movie as an .avi file. This file will need to be converted to use on your iPad (see below). The other option for finding free movies is to download a torrent file. This is only legal if you own a physical version of the movie. Most movie files that you download using torrents will need to be converted before they can be played on the iPad (see below). For more information on downloading torrent files, click here. Most files that you download online will not be compatible with the iPad. You can use the free program Handbrake to convert them to an iPad compatible format.  Download and install Handbrake from handbrake.fr. Start Handbrake and click the Source button. Select the downloaded video file from your computer. Click Browse next to the "Destination" field and set where you want to save the converted file and what you want to name it ("moviename-ipad" is an easy way to tell that you're selecting the converted version). Select "iPad" from the list of presets. If you don't see the Presets list, click the "Toggle Presets" button. Click "Start". Handbrake will begin converting the movie file, which may take a while. You can monitor the progress at the bottom of the Handbrake window. Now that the conversion is complete, you can import the movie file into iTunes so that it can be synced with your iPad.  Click the File (Windows) or iTunes (Mac) menu and select "Add to Library". Browse for your newly converted file. Open the Movies section of your iTunes library. You can click the "Film strip" button at the top of the iTunes window to open it. Select the "Home Videos" tab. This will display all of the movies that you have imported into iTunes. To move the movie into the "Movies" section, right-click on the movie and select "Get Info". In the "Options" tab, use the pop-up menu to select the category that you want to move the movie to. Now that the movie is in your iTunes library, you can sync it to your iPad to watch any time. Click here for more details on syncing video files to your iPad.

Summary:
Find a movie file to legally download online. Download a movie torrent. Use Handbrake to convert the downloaded file for use on the iPad. Import the converted movie into iTunes. Sync the movie to your iPad.