What exactly is "libh264streaming" ? Searches for it on Google turn up only this thread with that exact text. From you description it sounds like it's not streaming the video at all but just providing for progressive download.
Progressive download is sometimes incorrectly referred to as streaming. It simply is a normal HTTP download of a file and as long as the video headers are at the beginning of the file, Flash will start playing the file as soon as it has the headers plus a certain minimum amount of video data (4 keyframes I believe). Progressive download traditionally does not provide bandwidth throttling or other advantages of streaming but recently some have provided implementations that download slowly which is closer to streaming and can start progressive download in the middle of the file (dynamically rewriting headers) to allow people to jump to the middle without downloading the entire thing.
The Flash Player only supports RTMP for streaming. This is a proprietary protocol supported by Flash Media Server and several open source options like Red5, rubyizumi. Adobe just two days ago announced that it will be publishing and provide open licensing for RTMP, so you should see more products with RTMP support in the near future. Streaming provides a two-way communication with client and server so server sends a requested number of frames as buffer, and client requests frames to fill buffer as needed. Server doesn't send more than is requested and server can seek to various points with only the buffer needing refreshed, not the entire video.
If you want to provide large files, you probably need a true streaming server. One alternative would be to break up the files into chunks, download them as needed and play them one after another. That would be complicated too, but doable.
HTH,
Sam
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