AOL (NYSE: TWX) continues to reinvent its approach to a variety of initiatives under way before Randy Falco replaced Jon Miller as chairman and CEO last year. The latest: swapping its own video download business for Amazon (NSDQ: AMZN) Unbox. Essentially, the “buy videos” channel on AOL is now the Amazon Unbox channel for the rental or purchase of TV shows and movies, while AOL’s focus goes totally to ad-supported streaming video and video search. Fred McIntyre, SVP of AOL Video, told Om Malik at NewTeeVee: “We’ve worked hard to strike distribution deals with leading content providers and AOL video is currently the only online video destination that offers free streaming prime-time content from all four major TV networks.”

As for Amazon, it could be a significant plus for Unbox, both in download numbers and in the continuing push to be noticed in the shadow of Apple (NSDQ: AAPL) iTunes. Much of its recent publicity has stemmed from a deal with NBC Universal (NYSE: GE) that coincided with NBCU’s decision not to renew its video sell-thru contract with iTunes. Roy Price, director of Amazon digital video, told me it fits with Amazon’s general goal to reach out to customers wherever they are. (The service is already offered through TiVo.) Price said the integration is underway.

Under most circumstance, this would mean that AOL stands to make less per sale but it also should cost less since Amazon will be carrying back-end billing and technology.