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This has to be one of the weirder and more disturbing rumors I’ve ever read, though it doesn’t sound so much like a rumor. Wal-Mart was at first accused of strong-arming the studios to not deal with Apple on selling movies, now it has flipped and the two companies appear to be working out a deal that would benefit both. If people thought the Apple and HP partnership to sell iPod’s was a match made not in heaven, I have no idea what this would be.

The most fashionable computer maker working with arguably the least fashionable retailer to sell digital movies just seems wrong on so many levels. Though according to MacNN, Wal-Mart is one of the biggest sellers of iPods, so maybe there is more here than meets the eye. I’m much more of a Target guy myself, but if Wal-Mart brings the leverage to get the studios behind iTunes I guess I can bite my tongue and take it like a man.

If the deal does happen, it seems like a win-win-win for Apple, Wal-Mart and the studios as everybody will get what they want and Apple can go on owning the video download business like it does already with music downloads. Amazon Unbox and Microsoft would look to be the losers, but it appears they both have other problems to worry about anyway.

Still, why is Wal-Mart insisting that digital downloads not undercut DVD prices? The percentage of people downloading will be a small percentage for at least awhile and I don’t think the hundreds of thousands of people shopping at Wal-mart will quit buying those two for $10 DVD deals anytime soon.

The big players keep winning while Joe consumer is stuck paying the same prices for lower quality merchandise.