This is Rock! Brad Murray from Leave It Behind wrote about playing streaming (flash) video using PHP.
You shouldn’t miss this thing. Streaming Video from Scratch - Part 1 and Streaming Video from Scratch - Part 2.

“Currently, the streaming software is pure PHP using no external libraries. This should allow the streaming system to scale anywhere from a single script installation on a shared web host to a multi-server configuration serving up a gigabit of video.”

Check out also the sample here.