Right, let's clear this up a bit, shall we?
First - join Lovefilm and yes, you can download some titles, but these are not HD and I'm pretty sure you can't stream them to a 360. The format support for streaming using the Xbox is very limited and Lovefilm downloads are restricted to Media Player 11. However, if you're looking for a mail-order disc-rental service, Lovefilm is very good indeed, and their catalogue of HD titles is getting bigger all the time. However, to watch HD DVDs on the system you've got, you'll have to go out and buy the HD DVD add-on for the 360, which is something we wouldn't recommend as the performance of this player is pretty poor.
Second - there is no reason at all why you shouldn't download the HD rentals from Xbox Live. The Samsung TV is HD-ready, and the component cable is perfectly capable of carrying HD signals. Just make sure that the switch on the cable is set to HDTV, and that you've changed the settings on the system blade of the Xbox dashboard so that it knows to output at 720p. Then you're away. You will definitely notice a difference between the picture quality of the SD and HD movies you download.
Third - yes, it is disappointing that at this point you can only rent movies from Xbox Live, but to the best of our knowledge there are still plans to expand the service so that TV shows and films can be bought in the future.
Hope that helps, and let us know how you get on.