You've created the video correctly. You need a "helper" file to enable the streaming. Create a text file (notepad works fine), and name it the same as your video file, but with .ram as the extention. In this file type in the full URL (starting with http:// ...) of the .rm file and upload it to your website. Use this .ram file as the link to click on instead of the .rm file. The browser will download the .ram file (which is very tiny, so it will download fast), and because of the .ram extention it will launch RealPlayer, which will then fetch the .rm file and begin playing it.
One other feature i didn't mention earlier is that you can use the .ram or .wvx (.wax for audio) to list multiple media files, one line per URL. When clicked, the first file listed will start playing. The person viewing may use the forward & backward buttons on the player to step through the files like chapters on a DVD.
You may realize from this that the helper file doesn't have to have the same name as the media file, but it helps keep track of them if they do have the same name ;) In fact, the helper files and the media files don't even have to be on the same web server. The helper file is just an index that tells the media player where to go look. It's advantage is that the browser can download it nearly instantly.
Just one little thing: The 'helper' file must have a carriage return at the end of the line, and be uploaded in ASCII format. Without that carriage return, some player/browser combinations won't launch correctly.