World Foundry can load data as-needed (i.e. stream data) from CD-ROM as the player progresses through the level. Three rooms in the world are active at any time - the current, the previous, and the next. All others are "frozen in time".
How exactly the engine streams data from CD-ROM is a total mystery. Black box. Question mark. As more information is discovered, it will be placed here.
actually allocates all memory needed for the level at level start time (this is not 100% accurate - there are a few dynamic allocations - but it is mostly true). So though the data is streamed, the memory needed is already pre-allocated. Streaming means that the actual loading of the data for a room (the geometry and textures contained in it) is deferred until necessary.
Streaming saves system resources by not loading all textures and all geometry models into memory at once. Instead, only the textures and models for the active rooms (previous, current, and next) are kept in memory.
This makes it theoretically possible to stream data over an internet connection. However the world must be static (because of the pre-allocation of memory needed for the level). Also multi-user streaming raises several questions. There are other libraries designed for multi-user streaming of dynamic worlds over the Internet, e.g. Virtual Object System VOS.