I'd like to know how to do this too, if I ever rent a film I usually rent SD as its cheaper and I don't have a 1080p telly. Lat time I ended up having to rent on Mac then air playing to Apple TV.
I found this over on Apple's discussion site here, but I haven't tried it yet:
Switch to Standard Definition
If you tried the above steps and still can't play movies or TV shows from iTunes, switch from High Definition (HD) to Standard Definition (SD):
Apple TV (4th generation): Go to Settings > Apps > iTunes Movies and TV Shows > Video Resolution and select Standard Definition.
Apple TV (2nd and 3rd generation): Go to Settings > iTunes Store and select Standard Definition.
Your iTunes Store purchases and rentals will now be in SD. You might be able to switch between HD and SD content in third-party apps. Check the settings within the app or contact the developer for help.