It's "(sort of) new" because it's actually CinemaNow, founded in 1999 and arguably one of the oldest online video distribution services. Best Buy purchased the CinemaNow trademark from Sonic Solutions and will use it instead of "Best Buy," presumably in hopes that competing retail stores will be willing to carry devices with the service built in.
Those devices will include select LG Blu-ray players with more consumer electronics devices to come, including some Samsung and Insignia gear. Devices will offer both standard and high definition rentals (some at 1080p) at the fairly standard prices of $2.99 or $3.99, and purchases at $9.99 - $19.99.
According to BusinessWeek, Best Buy VP Chris Homeister says that a subscription service might show up in the future, too.
It's not odd that a traditional DVD retailer like Best Buy is investing resources in an online alternative to DVDs; these new technologies will help the electronics store push more electronics sales. Best Buy also purchased music downloading service Napster, though it hasn't made a big impact on the digital music industry.
Competing retailer Walmart purchased Vudu a couple months ago for many of the same reasons.