There is an app for iPhone and iPad called Movie Vault.
It is not free (it costs £1.99 - $2.99), but you can watch 1000's of classic, public domain, films for free.
Most of the movies featured in Movie Vault are not good and the image and sound quality is worse than awful, however there are a few B-movies and other classics that are really worth e.g.: 'Detour', 'Sabotage' and the 'Night of the Living Dead'.