Top 10 websites to watch movies for free, legally

Rajshri.com: Rajshri is one of India's oldest film studios and they have ventured in a big way into the online video arena. Since their first web premiere of Vivah in 2006, they have brought together wide collection of films and TV shows on Rajshri.com in as many as seven languages (Hindi, Tamil, Telugu, Marathi, Bengali, Punjabi and Gujarati).
http://www.rajshri.com/

The Internet Archive: If you want free content (not only movies, but also texts, audio and software) head to Internet Archive, the non-profit online digital library. Apart from other forms of video, the Internet Archive houses hundreds of feature-length films.

While you might not find the latest releases, there is a sizable collection of classic movies to choose from. Not much of Indian content though.
http://www.archive.org/details/movies 

IMDB: The Internet Movie Database not only provides information on movies, TV shows, actors and crew but it also has a large collection of over 5000 full-length movies.
http://www.imdb.com/features/video/browse/film/

BigFlix.com: BigFlix offers both free and paid videos and their language coverage is wider than Rajshri's, with movies from 14 languages including a few in foreign tongues.
http://www.mybigflix.com/home/movies/free

Films Division: The Government of India's film-medium organisation has been producing documentaries, short films and animation films since 1948 and its archives hold over 8000 titles. While only a fraction of the entire collection seems to be available online on their website, it does have some gems in there.
http://www.filmsdivision.org/

Veoh: While some unauthorised content are known to find their way into Veoh, they do have a dedicated section on movies that are both free and legal to watch. On last count the Veoh collection housed about 350 films.
http://www.veoh.com/browse/movies/

Free Documentaries: If non-fiction is what you prefer, then log on to www.freedocumentaries.org. The website also allows free downloads for several films.
http://www.freedocumentaries.org/

YouTube: The world's largest video-sharing website also has a section on full-length movies that can be watched for free. YouTube's collection also includes about 50 films from Bollywood.
http://www.youtube.com/movies

ClearBits: Torrents account for a sizable portion of Internet traffic and much of the content that is being transferred between computers is not legit. If you prefer the BitTorrent route to get your movies www.ClearBits.net can direct you to open licensed media and therefore legal to download.
http://www.clearbits.net/movies

Entertainment Magazine: While the website's user interface may be from the last decade, it is not difficult to reach the content that we want - free movies. While Entertainment Magazine indexes content from other websites, it sorts the movies into well-differentiated categories and also provides direct links to the movie files.
http://emol.org/movies/ 

Source: IBNLive.com