Well, I'm not positive, but as far as i know, when streaming, you're downloading the data of the video file or w/e so you don't encounter constant buffering (the video pausing to load). When you go on any stream you can usually see the bar fill up at varying speeds which means (to me) that it's downloading some kind of data. AFAIK it's not saving anything on your hard drive like an actual file. Faster connections =better download speeds which = the ability to play HD video without a problem or lag or buffering. So technically it's downloading data even though it's not saving anything.
At least thats how i interpret it. I could be way off base. I will wait for
or Joona to give a proper explanation