Dawn of the Dead is £1.99 at the moment, but you can get the original Night Of The Living Dead for free here. It's legal too. I wouldn't recommend downloading the MPEG1 version, apparently the MPEG2 (easily convertible to DVD) version is good. You might have heard of this before, but I'm posting this for the benefit of those who haven't.
This site has lots of free good movies (and even more rubbish!), there are 1940's cartoons too.
"In this classic yet still creepy horror film, strangers hold up in a rural Pennsylvania farmhouse and battle constant attacks from dead locals who have been brought back to life by mysterious radiation.
WARNING - This is a graphic horror film with some gory special effects."