Free movies on Youtube on Android
I do see what you are talking about. In my YouTube app (ICS version) I can see several categories under "Browse", where it seems movies would fit in, but this category is non-existent. I do know that there are many videos on YouTube that are "Not available for viewing on mobile devices", and I think this is what's happening in this case. 

For example, "Talladega Nights" is currently available under the YouTube movie section, but cannot be found in doing a search on the mobile app. 

It looks like this is a desktop only feature for now :/