"You can stream MP3s quite easily, without a special server. You simply
need to create a meta file with the URL of the MP3, and send the correct
Content-Type header, audio/x-mpegurl m3u. I created a little 2 line PHP
script that automates this process. I originally did something like this
in the UserTalk language (the programming language in Frontier) for http
streaming of RealAudio files. 

This link points to that script, and the file that this URL points to will
stream..."

yes, that's what Apple, Inc. (mistakenly) calls streaming as well. But, If I understand this correctly, it is only pseudo- streaming and you can still get at the file easily, if you want to. Real streaming requires a server, and real streaming files are fairly difficult to download. (Another group here at Dartmouth tested your approach and their hacker students were able to download to their machines in no time....)

 We were particularly interested in using this approach for copyright enforcement, but gave up on it. It's either .mov files or MP4 files.

Otmar Foelsche