Some courts have held that even temporary copies may violate the law. However, the Copyright Office contends there is no violation when "a reproduction manifests itself so fleetingly that it cannot be copied, perceived or communicated."
Though the law is unclear, it is useful to note that owners, such as the MPAA, rarely go after individuals who watch streaming movies. Illegal or not, it's much more difficult to track these users down. Unlike BitTorrent downloads, the MPAA can't just sign into a program and snag IP addresses.