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I always offer both downloadable & streaming.
MPEG-1 and WMV all the way. I hate Real with a passion... and so do many surfers. Tried installing Real Player recently? 10 seconds to install... 15 minutes to navigate through the ads & uncheck all the spyware and useless shit that comes with default installation.
If you're worried about Kazaa, edonkey etc... you can watermark the videos. It won't stop the file sharers but at least people will know where the videos have come from. And there is less chance that other webmasters will steal your videos for their own use unless they're willing to clip off your watermark - it's a lot of work to remove watermarks or put your own over the top because the videos need to be re-encoded.
Other than that, look into DRM.
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