Cranking up your iTunes movie theater is a lot like playing a song: Double-click your chosen video's title and iTunes starts playing it. When you click either the Grid or Cover Flow view buttons (circled), you see the videos represented by either a movie-poster type picture or a frame from the video. (Like album covers, videos purchased from the iTunes Store come with the nice artwork.)
iTunes gives you a few video-viewing options. You can play the video in iTunes' lower-left corner artwork window, opt to have it open in a separate, floating window (as shown here), or watch it at full-screen size on your computer.
To make your screen-size choice, in the iTunes Preferences box (Ctrl+comma/⌘-comma), click the Playback tab. Make your decision using the drop-down menus for movies and TV shows, and music videos.
You can also pick a variety of screen sizes under the View→Video Size menu in iTunes, including Half Size, Actual Size, Double Size, Fit to Screen, and Full Screen.