If there's a video stored on iTunes on your computer that you would like to watch on your iPhone, you can access the video with Home Sharing. You have to have iTunes 10.2 or later and both the computer and your iPhone have to be on the same Wi-Fi network. You also need an Apple ID and password. Follow these instructions:
On your computer, in iTunes, click File→Home Sharing→Turn On Home Sharing.
Enter your Apple ID and password, and then click Create Home Share.
On your iPhone, tap Settings→Video.
In the Home Sharing section, type in the same Apple ID and password.
You see Home Sharing only if you have an active Wi-Fi connection.
Open the Videos app from the Home screen and tap Shared in the Browse Bar.
The Shared screen opens with two choices: my iPhone and your user name.
Tap your user name.
A list of the videos stored on your computer appears on your iPhone.
Tap the video you want to watch and follow the previous instructions for playback control.
To return to the content on your iPhone, tap Shared and then tap my iPhone.
Streaming media is when whatever you're watching or listening to is stored somewhere else, as opposed to being stored on your iPhone. The media plays as it comes across the local network or from the Internet and isn't saved or stored on your iPhone.