There was some controversy a week or two ago, when the iTunes Match beta was opened up, about whether you could stream music or if it had to be downloaded. If I recall, Apple even released a statement denying that you could stream music. But look at Eddie Cue's discussion of iTunes Match in the keynote, around 42:00. He says "I go in and I turn on iTunes match and now I can see my whole iTunes music library. I can stream any song by just tapping on it." The slide summary of iTunes Match uses the term "stream" and Cue says "Stream any song, album, or playlist. We'll cache the songs you listen to most, right on your device." That seems pretty clear to me. iTunes Match DOES play music that you don't download.