When Google announced Google Videos a while back, they also mentioned that the movie rentals feature would only work for non-rooted users. But this is no longer true thanks to an XDA Member who managed to modify the Google Video's APK and allow rooted-users to play rented videos straight from the Android Market!
The DRM Licensing is not affected so you'll only get what every non-rooted user gets - the ability to rent and play videos from Android Market. If you're interested, head on over to the link below to grab this special modified APK of Google Videos.
Source: XDA Developers Forum