Does streaming uses internet speed?,

Does streaming uses internet speed?

Streaming video from PC to PS3 (Wifi) , not from website/server.

For example:
I'm using a 1Mbps streamyx line and a 300Mbps modem.
I'm using my PS3 and stream my video (mp4) from my PC via wifi, it lags a lot.

So, does the maximum streaming speed depends on my internet speed (1Mbps) ?
Or, it uses the maximum speed between the two machines (300Mbps) ?

Thank you!