It's an argument that has gone on from the early days of video delivery - streaming or progressive download ?
In fact, there is actually very little difference between these technologies - they both involve transferring packets of data between two computers.
However, progressive downloads usually involves transferring a whole file (albeit sometimes temporarily) to the client computer. Traditionally, this was a direct transfer from server to client, but increasingly peer-to-peer technologies are being used so that the file can be delivered from multiple computers on a network (and consequently save on bandwidth costs); companies such as Rawflow and The Venice Project are adopting this approach and I've previously blogged about Kontiki, whose technology has allegedly proven to be problematic in trials.
Streaming on the other hand usually involves a socket connection between two computers - a server and a client and only parts of files are ever kept on the client computer; specialist protocols such as rtsp and mms were developed to enable the more efficient transfer of packets of data between the server and the client. (There are some hybrid protocols such as SDP, which has not been popularly adopted).
The cost of server software for the Flash streaming protocol resulted in some experiments that show that it's possible, with some jiggery pokery, to make progressive streaming replicate the 'instant on' of streaming networks, which closes the gaps between the two technologies further. The enabler for this is ever faster broadband connections.
With cheaper technology and lower distribution costs P2P video is set to become a sensible option over the coming year. The remaining barriers are with the consumer - they will generally need to install a client and agree to have their bandwidth use for other viewers.