The whole point of using the streaming interface in WCF is that the client gets a stream from which it can read blocks of bytes. The whole return object (file, picture, video) will NOT be assembled in full on the server and sent back as once huge chunk, instead, the client can retrieve chunks at a time from the stream returned from the WCF service.
Your client gets back a "Stream" instance, from which it can then read the data, like from a FileStream or a MemoryStream. That way, the amount of memory needed at any given time is reduced to a manageable size (instead of potentially multiple gigabytes in the buffered mode, you'll transfer a large file in e.g. 1 MB chunks or something like that).
Marc