According to Deadline Hollywood, Universal scrapped the plan because of requests from angry theater owners.

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The two pieces that are nearest and dearest to our hearts are the WNHDB3004 and WNHDB3004, the former of which is an 802.11n HD Home Theater Kit and the latter of which is a universal WiFi adapter that adds wireless support to any AV product with an Ethernet jack.

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The movie would have only been available to Comcast cable subscribers in Portland and Atlanta (Comcast owns Universal) but even the experimental video-on-demand offer put theater owners on edge.

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Discovery HD Theater is airing episode one of Gamer Generation while the Battlestar Galactica Miniseries is on Universal HD.

ENGADGET: HDTV Listings for January 6, 2006 HD