Multicast is weird.
It's designed for the internet or stuff with complex network topography with routers and such...
Say you have a hundred clients. They are seperated from your server by a spiderweb of routers.
So you send out one stream to all of them, instead of unicast were you send out one stream for each client.. which the standard way of streaming.
If your stream hits a router that has your clients on more then one port, and the router supports it, then it will duplicate the stream for each of it ports. Then each router should do the same and so on and so forth until every client gets his or her own data stream. This was based of off the mbone network which was suppose to make video conferencing practical over the internet. Unfortunately many ISPs use technology and routers that don't support that, even though the internet backbones do.
If your network is fast and not to conjested then unicast would be the prefered method. One stream for each client.
If your network is simple, say a network of PCs connected by a simple hub or switch, then broadcast would be the best way for large bandwith streams.
Also there is another form of multicast that is different. What it does is that each client that receives a stream also transmits it back out for another client. Like how P2P programs like bittorrent works. I am not sure about how VLC does it. I think that this is how things like Shoutcast/Icecast work.
Not to sure.