According to the post over on the US PS Blog:
“VUDU delivers a cinema-quality movie experience in the comfort of your home theater, complete with full 1080p HD with 5.1 Dolby Digital Plus sound, and video on-demand without downloading. No subscription is necessary to browse their library of more than 4,000 HD movies, including many new releases the same day they are released to DVD and Blu-ray. The movies are available on-demand and you only pay for the movies that you watch. Also, when you sign up for a VUDU account, you will receive a $5.99 credit on your account for one free HD rental.”
To download VUDU, go to the media category in the PlayStation Store, download the app, and after it is finished it will appear under the video icon in your XMB. .
VUDU 2.0 was recently revealed at a press event, so if you download the app, it will automatically refresh on your PS3 when it launches next month. The newest version will also support Move for motion control navigation.
The service joins Netflix, Hulu Plus, MLB.tv and NHL GameCenter Live which are already available on PSN.