Streaming usually refers to a live video feed, something you might see at Ustream.TV or Livestream. The Flash player itself is just playing back bits and fundamentally the user experience is very similar. When your playing back a static video from a site, you are actually playing back a file that is saved (and can be downloaded) on a server. With streaming, the video is being produced on the fly, sent to a server and then sent to your Flash player. Generally you can't just download a streaming video, though there are ways to do that as well.

from what i understand, when you watch videos online, most of the time you're downloading them, even though they're playing in your browser. but when you open a youtube page, the information is downloading into your browser's cache. streaming is just grabbing little bits at a time as you watch. like the difference between listening to the radio (streaming) and downloading a podcast (downloading).

Actually, Ryanne is on the right track and xcalickx latter description is more accurate. The answer rests in the issue of progressive download vs. true streaming. I would say ekai's key term is the word "live" streaming. Which gives us a key differentiator: You can't progressively download a live feed. Live feeds would always require a true streaming connection (a computer connected to the Internet with software/hardware that is designed to deliver an optimized "stream" of video to the end user).

There's lots of info on the web about the differences. Do a search on progressive vs streaming and browse away.

While both are affected by the user's Internet connection, typically streaming's biggest advantage is delivering the first view quicker, and providing a more dependable viewing experience.

From the viewer's perspective, "streaming" means you can click play and start watching immediately. "Downloading" means you have to pull in the file before you can watch.

On the tech side, "progressive download" is the terminology used to describe video that is downloading, but viewable as it downloads. "Progressive download" is attractive to because it doesn't require any special server or configuration. You just point the player to a file and go. More often than not, the viewer can perceive this as streaming.

Streaming usually requires special server software of specially encoded files.

Every bit the viewer sees is downloaded to them over the Internet in all cases. The differences are in how it is handled on the user end. Streaming tends to just arrive, be displayed, and discarded. Non-streaming varies as to how it is handled. In some cases you can download a file then view it when you want. In some cases you can watch as it downloads (e.g. "progressive"), and you may have an option to save the file when it is all downloaded.

In the context of Quicktime which is what I work with you can have live streaming and you can have what may be best called file streaming. Quicktime also has a "fast start" capability that helps with progressive.

Generally streaming can start displaying as soon as enough has been downloaded to get started. For non-streaming the fast start feature allows it to start displaying sooner, with less downloaded.

All cases of watching while still downloading, including live streaming, depend on having enough bandwidth to keep up. If you can't receive it as fast as you are viewing it you either have to wait until you have gotten well ahead in the download and/or have pauses to catch up or other discontinuities.

In some situations it is feasible to do live streaming on a local network using your own resources. If you want to do live streaming over the Internet you usually have to to do it via a service that is set up with the right Internet connections and bandwidth. You feed the video over the Internet to them and they serve it to viewers. Not real cheap.

Serving normal Quicktime files, with or without the fast start feature, can be done from ordinary web servers, give or take bandwidth considerations when watching before a download is complete. Serving streaming Quicktime files requires a specialized web server program. Some web hosting services offer the capability, and some do not.

One attractive feature of streaming files rather than normal serving is that with streaming a file the user can jump around to any part of the file without having to wait for the download to get to it. Basically it seems the user's system sends requests for whatever part of the file it needs. The special serving for streaming is able to handle that. But of course that is when you don't get a complete file to save. It pretty much gets discarded on the fly.

By the way I have seen that Apple is moving towards an upgraded Quicktime that will be able to do more of the streaming tricks over an ordinary feed from a normal web server. I would think it will be quite a while before everyone out there will be upgraded and able to take advantage though.

The industry folks who provide video services on the professional level differentiate the two like this:

On Demand - like YouTube, etc. True the file does technically "download" to your computer it is never stored there. You can get FireFox and other browser plugins like DownThemAll that will actually download the the file to your hard drive.

Streaming - Like uStream, Livestream, iChat AV, etc. The video is literally "streamed" to some kind of player like Quicktime, Flash, Windows Media. Technically it does "download" momentarily to a cache so the player can play it.

I've found that these terms, on demand and streaming, are good ways to differentiate the two versions of video on the web. Clients even understand the difference when you use these terms!

ekai is right about that, but I think that people also use the term 'streaming' to distinguish between downloaded video and something watched directly on the web. It seems like the terminology is a little bit slippery.