Chris, yes, Apple TV streams from the cloud. The distinction between streaming and downloading is essentially meaningless, though, because the “download” is really just a cache for the Apple TV. You can’t benefit from keeping downloads. The ATV is a streaming box for the cloud, and every time you repeat stream and the content is not in the device, it’ll be fetched again, consuming your bandwidth. This is not true for iTunes; those movies and TV shows end up stashed in your library under Films or TV Programmes (different for different markets). Then you can sync or “home share” to your ATV, ahd thereby save your precious bandwidth.
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