When you drag a file on to the Movies pane, Wii Transfer will automatically prepare it for streaming. This will convert to Flash Video format and cache the file in /Users/your-user/Library/Caches/Wii Transfer/Converted Movies. You can change this location in the Preferences window.
You can also click the Find Movies button if you are running 10.5 Leopard, or choose File → Open Podcast to browse video podcasts that have already been downloaded by iTunes. See Finding Movies and Converting Video Podcasts for more information.
Wii Transfer will automatically manage files in this folder by deleting the oldest files. By default the most recent 20 movie files are kept.
To watch movies, make sure the sharing checkbox is checked in the Sharing pane, then connect from your Nintendo Wii. Click on Movies from the main menu to see a list of converted movies, then click a movie to start playing it.
There is a quality preference for streaming movies in the Preferences window. After adjusting the quality, you will need to re-convert any existing movies that you want to watch with the new quality setting.
Demo limits: The demo version of Wii Transfer does not include sound in the converted movie. To remove this restriction, please purchase a full license for Wii Transfer. You will need to re-convert any movies after you register. See Purchasing.