More and more films are available online these days, especially horror films, which have a large number of rare titles that are difficult to find anywhere else. And there are sites where you can download or stream these films for free on your computer.
Visit a site to search for the horror film you want to watch. The top free sites for films, especially horror films, are hulu.com, Internet Archive (archive.org), moviesfoundonline.com, Fear.net, Google Video and YouTube.com. You can sign up for all of these sites free.
Explore each site and determine which ones work best for you. Hulu offers a myriad of B movie horror films, all in excellent quality. Google Video has hundreds of great studio horror titles, but the quality is only fair, much like YouTube. If you can't find your horror film on one site, there's a good chance you can find it on another. These sites try to carry as many different films from each other as possible.
Find your title and download it or stream it on your computer. How well it works depends on your connection speed.
Quit all other applications when watching films online. The more applications running, the more trouble you might have getting a smooth picture. Also, if you choose to download, some people consider the VLC player the best for online videos. QuickTime is another good, reliable program. Turn off the lights when you watch the movie online, so that the image stands out more on your computer screen. And because it's more fun to watch that way.
Other then the sites listed above, which provide movies legally (though YouTube sometimes walks a fine line), check the legality of each free horror film site. Check out their terms and conditions at the bottom of their page which should be there if they are legitimate.