Although it's been around for some time, I never used it in practice. iMovie Theater I mean. For some time already, Apple added an extra service to iMovie (I wouldn't really call it a 'function', but rather a 'service') that stores in the cloud, somewhat like iTunes Match and iCloud, and for an annual fee if your free storage availability proves inadequate, all of your videos that you want to share with the family or watch by yourself. This indeed includes all of your video clips, regardless where you edited them, like on a Mac or an iOS device as long as they were done with iMovie. I generally prefer the Mac version of iMovie as it has much more functionality, and is far more intuitive than the iPad version. Most important, you can dress up your clip project with any music score of your liking coming from your iTunes library, when of course you have those music files stored locally. I'm saying this because, for instance, you may have chosen to keep all your music online and access it from all your devices anywhere 24/24 with iTunes Match enabled (which requires another annual fee... how else shall we render Apple Investors wealthier, right?). In this case, you first need to download your selected music file from iTunes Match before dropping it on the timeline of a Mac version of iMovie. This trick won't work on an iOS device as iMovie for iPad/iPhone rejects your legal music (even for 'fair' use) and refuses to add it to the timeline for IPR 'infringement' reasons. That's kind of an overkill if you ask me. Plain ridiculous.
Anyways, the Theater concept is simple. Any video clip you edit on any of your devices running a version of iMovie, when you finish your edits and you hit 'share', one of the menu choices is 'Theater', which is a space in iCloud reserved for your video work. iMovie actually renders and stores in that space all your video clips. This area is readily accessible from any of your iOS and MacOS hardware, and on top of that, oh, that's so sweet!, from all your AppleTV devices connected to your big ass TV monitors anywhere in your house. I got two of those, in fact. One connected to the SONY in the living room and one linked to my Samsung (I am ashamed to admit), a S.M.A.R.T. TV in my loft, exactly next to where I sit.
Since it is only iMovie edits that are shared in the Theater I am forced to load into an empty timeline any of my older edits, done with whatever, from FCP* to Vegas, and without any additional editing, I simply fool the system and share the edits into the Theater space. This way, I was able to upload a lot of edited footage from more than 25 years ago. Their video quality (remember the low definition videos we did those days? Appalling!) doesn't naturally improve by this move; what did you expect (like a teasing Nicole Kidman sez in her recent soda ad), but at least they are readily available anywhere you want them and you don't have to go search those old tapes in your dusty loft when you need them. Of course, digital video files take considerable space, even after today's far better compression algorithms, and soon you'll realize that the 5 GB that Apple offers for free are hardly sufficient to hold a couple of iOS backups, your messages and your video clips. I had to add 20 more GBs to that free 5 GB space by paying Apple 32 euros a year and I thus solved that 'problem'. You really need that space if you are a bit serious about storying a descent number of clips in the cloud.
Another interesting element is that, when you hit a Theater clip to play it on a Mac or AppleTV it starts playing right-away, whereas, on an iOS device it shows you a screen like this here (click for larger view) with the choice to delete it, or download the clip from the cloud locally (for off-line viewing). That's good if only for storing it locally on a different device, rather than only have it online, on a cloud fee based service (some people feel quite insecure about this).
The only drawback I see (and maybe I missed it somehow and it's not really a problem, but then, if it is not, then please let me know too) it is only those with a device logged in iCloud with someone's credentials that can access someone's Theater. It's alright if it's 'inside a family' thing, but inconceivable to do with friends, as sharing of your id credentials to supply access to your Theater will also give them access to your email account, and I am sure not many around who are too keen to let this happen...
* Those of you, who take yourselves rather seriously, and prefer Final Cut Pro to iMovie, you are out of luck if you thought that dear Apple would have provided export facility into the Theater. You can forget about it and you'll have to fool the system as I described above to get your edits into the Theater space.