When viewing videos stored in my Google Drive on my nexus 7 I am noticing that it is downloading first. This can be time consuming when dealing with large files.
Google Drive doesn't currently support streaming. Same goes for Box. If you want to stream, it'd be better to upload to YouTube, unless there are copyright issues.
Sent from my DROID RAZR using Android Central Forums
Not sure about the PC installed part of Google Drive, but as far as the App, it's just showing you the files in the cloud - they're not actually on your device.
That is how it works on a desk or laptop. On phones and tablets the files are stored in the cloud. You can mark the file as available offline by tapping the thumb tack icon. It will then be downloaded to local storage.