YouTube! Now hold on, before you all cry "Don't be stupid".
YouTube can look pretty good if you know what you're doing. The High Quality can be great, and they even do HD now at 1280x720.
But how can you restrict it to certain people? Well....
A new YouTube account could be made, the film uploaded (in ten minute sections though of course) and then the film is set to private. This means nobody can see it unless the account holder allows them to. It won't turn up on YouTube searches for instance. What would need to happen is that anyone invited to watch it would need a YouTube account. Then the account hosting the film adds each person to the list of friends who are allowed to watch the film. It's easy to do.
To make sure the correct people were asking to become friends, there could be a code given out via the Personal Message system on this forum. Each code being different. When asking to be a friend of the YouTube channel with the film, you would have to send a message quoting your code. This would be verified and the user would be added to the friend list and allowed to view the film.
As mentioned, the film would be split into 10 minute sections though.
All sounds a bit dodgy though, even with the described measures in place.
YouTube does support the upload of longer videos than 10 minutes now... Although not delved into it yet, but they have been streaming feature length movies in the USA.
Google Video is definitely supports feature length in the UK, and seeing as Google are behind both now, I think you can set up the invite feature on there also... Really, this is easy to do...
Online idea is a bit of a no-goer I'm afraid. There's so many hacks out there for just about anything that (although I trust my maniacs) it could end up on someone's hard drive and be selling down the car boot before the end titles have finished.