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If you want the very best in quality there is still no substitute for Blu-ray. Sure, you can go on thepiratebay and download some full Blu-ray rips, but very few of them are uncompressed, other than occasionally when you see 1 or 2 versions of the major releases.
I think anyone running a very large screen and surround sound system would want a fully uncompressed version, whether they rip it to their hard drive or not in the end.
I'm not up on how the legal digital downloads work, but I'm guessing they probably don't offer the 40 to 50 GB downloads you would get if you ripped a Blu-ray 1:1 directly to your computer/media server.
Most are going to be h264 compressed and some won't even include DTS Master Audio tracks. I can just imagine how badly they compress these movies on services like Netflix, etc.
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