Streaming a ThinApp package means the package is hosted on the network and the clients access the packaged application over the network. The application is executed on the local client. So ThinApp streaming is nothing like Server Based Computing (SBC) where the word streaming is often being used as well. In SBC, the execution of the application happens on the server backend and only screen updates are sent to the clients. Commonly used Server Based Computing systems include Citrix XenApp and Microsoft Terminal Server/RDS.
When a user clicks on a ThinApp package, the ThinApp runtime is downloaded to the client in whole. The ThinApp runtime is approximately 600 KB so this happens very quickly. When downloaded, the runtime executes and creates the awareness of the virtual environment. It is not like the whole virtual environment is downloaded, but the runtime makes sure it loads the filesystem database and virtual registry. Then the source of the entry point is executed...