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"Streaming" is a generic term, which in simplistic terms means; Encoding OR decoding data "on the fly." There are many different ways to send and receive streaming data. There are two ways to look at streaming -- from the client side (e.g. end user's software), and from the server side (e.g. a web server). And there are two kinds of basic streaming types -- progressive streaming and packet streaming.
Packet Streaming
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From a client side prospective, one might be familiar with the term "buffering" or "negotiating." For example, if you connect to a live radio broadcast through iTunes (client), there is usually a breif period or time between initiating the connection and when the audio starts to play. It is during this time that iTunes is negotiating with the server to connect to a stream. At times the audio may stop, or seem to skip. During these periods of silence, there is a re-negotiation of the connection, usually due to high network traffic, where the server and client must re-negotiate the connection in order to ensure that no packets are dropped or reduce the connection speed to accomodate the high network traffic by establishing a new, lower bandwidth connection.
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A good example of a progressive streaming approach is used by the folks as Wimpy Player. The Wimpy tools all rely on the progressive streaming approach to serve and play audio and video files within a web page.
Understanding a basic streaming server setup.
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