Can I use the Apple iPad Camera Connection Kit to stream movies from a usb flash drive?

No. A lot of USB flash drives require more power than is supplied to the kit, and if it does recognise it then you will need to copy the film onto the iPad from it, you can't play content from the drive.

In the past I've managed to copy an MP4 film via an SD card with the kit and been able to play it, but a film bought from iTunes didn't play (you can't copy content to the Videos app via the kit). Also the kit only recognises content that is in a particular format - the card has to have a DCIM directory off its root, with the photos/videos underneath it with filenames exactly 8 characters long (no spaces) plus file extension.

If you want to copy films onto the iPad then there are some wifi-enabled drives that allow you to stream content from them to an iPad e.g. GoFlex Satellite.