The user clicks a link to watch a video. If the video is available, the first section of the video is delivered for viewing and the rest follow behind in successive chunks of data until the entire video is ready for viewing.
This is one case where watching a visual helps. Learn The Internet has an old school way of explaining streaming video. Sometimes a low tech visual beats 100 fuzzy words. Don't forget to come back.
Why Is This Important?If you watch online videos 9.5 times out of 10 you have been watching streaming videos. If you watch videos from Hulu and have had to wait for the buffer then you have been watching a streamed video presentation.
YouTube? Streamed. Good Morning America video clips online? Yes streamed, A live event on CNN? Streamed and multicasting to boot.
As a creator of video you want to be aware of how your videos are going to be distributed. For the most part they will be streamed. The video quality might suffer a bit but that is part of uploading video for public distribution.
Visitors to your video web host might have the option of downloading the original video. Or not. Many times it is your choice if you want users to download an original copy or not.