This has been discussed already. At great length. Here is what I found in November when I researched a post I made to usenet about a similar topic:

what do you do if your seatmate is watching adult videos on his laptop computer? (TravelBuzz!)
Inappropriate in-flight movies (TravelBuzz!)
Allow me to be frank, what is the PORN policy on flights? (Continental OnePass)
X-Rated Experience on CO? (Continental OnePass)
OT - if you're going to use your laptop in public... (British Airways Executive Club)
AA policy for movies on your laptop (American AAdvantage)
Is it offensive for me to watch a DVD of Queer as Folk on a plane? (GLBT Travelers)

To this list I can now add:

Inflight Porn (TravelBuzz!)



P.S. While researching this post, I came across this usenet post that has some similar themes.