When i open a file, the same file is downloaded to /var/tmp/kdecache-$username

How do i stream it?

If you open a file in a application which indicates that it supports file URL's then KDE will not perform this step. All KDE applications should support opening files from URL's. I am not entirely sure at what level this support is in with Phonon - but it is supposed to function.

Which application are you trying to do this with?