I'm not an expert on videos, we don't store them in our repository, but I'm pretty sure Laserfiche (Windows Client) does not have any native functionality to handle any of streaming/transcoding stuff you are talking about.  The client is just going to say "this is an electronic format document that I don't handle natively, I'm going to download it from the server and let your local machine handle it".  Then it'll open with whatever video viewer your machine has configured to handle that type of file.  It's basically the same thing it would do with a very large Excel or Word document, download it and let the other program open it.

EDIT TO ADD: If this is a really important requirement - you might want to look into the other Laserfiche tools that are mentioned in those posts as being able to stream video.  Unless I'm mistaken, it sounds like the Web Client can do it.  I don't use the Web Client currently, but there are posts here on Answers saying video streaming is available on "Web Access" starting with version 10.  "Web Access" is the Web Client - unless I'm mistaken there as well.

EDIT TO ADD ADDITIONAL: From the Help Documents:  Steaming Audio and Video Files in the Web Client.