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Linkster you are talking about the 50's and 60's, 8mm was not around in the 20's.
There were porn films back then, but mostly it was still photos that were sold ("under the counter"). The most popular way of showing moving porn pictures was in coin operated machines such as Mutoscope ("what the butler saw", like a giant circular "flick book" (imagine a giant roladex with one frame of the film on each page), you inserted a coin and turned a handle that moved the pages on the flick book round) and kinetoscope (film loop, like the kids toys you still see nowadays, where you look through a lens onto a frame of film and move the film on by turning a handle).
If you are really interested in the process Google "Mutoscope" and "kinetoscope".
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