The problem is; you can only 'stream' mpeg2's using the BTV Link client. You can stream wmv's via internet explorer. Unfortunately, wmv streaming only really seems useful if you have a software encoder card.
BTV won't let you do a mpeg2 capture and on the fly recode to wmv and stream that. If you have a software encoder card - it skips the mpeg encoding part and just encodes into wmv to stream. Then you can have a streaming quality and/or a recording quality.
The general consensus has been from SS that you can't use btv over the internet - but this is really coming from a support end I think - (speculating here) than any real reason it won't work. BTV link uses some broadcast/udp packets during finding the server stages - and these don't work well over the internet. Rather than get into teaching folks networking and tricks it's easier to say it won't run well over the net. The other reason is that the BTV mpeg2's are usually higher bandwidth than can _uploaded_ via someone's dsl etc. And since BTV Link won't recode to lower bandwidths, you're stuck with either recording a lower quality file to stream it (and thus look crap on the server) or your files are too large to stream.
So.. essentially. if you have a software capture card; you can stream wmv anywhere using IE. If you have a hardware capture card, you can only stream on a high bandwidth network - ie 802.11g/a (possibly b in some circumstanceS) or a wired network.
Or you use another approach entirely
As to how BTV works to a link client; I believe BTV spoon feeds the mpeg data to the client so it can watch it with a small amount of buffering. It's no overhead for the server really. A small trickle of data from the harddrive sent virtually untouched to the network card.