There are tons of ways to download movies from YouTube, but this is likely the easiest I’ve seen yet: http://keepvid.com/
Basically, open the site, paste in the URL from YouTube and then click on Download. KeepVid will then ask you if you want to download the video in flv or mp4. In this example click on mp4. When it’s done downloading go ahead by default you’ll find it in your ~/Downloads directory called simply video.mp4. From there, you can rename the file and move it into iTunes. Once there it can synchronize to whatever device you enjoy watching videos on and enjoy offline!