Ron,
The stream option, as aptly put, means the command by itself is not going to files on disk directly, it has to be piped and caught somewhere. You can either stream and extract from the other end like:
innobackupex --stream=xbstream . | ssh user@somehost "xbstream -x -C //path/to/dir"
You can then prepare the backup from the other end stored at /path/to/dir using --apply-log
Or store that stream into a file:
innobackupex --stream=xbstream . > /pth/to/backup.xbstream
And extract that with:
cat /pth/to/backup.xbstream | xbstream -x -C /path/to/backup/
Then prepare the extracted backup:
innobackupex --apply-log /path/to/backup/
You can find more examples here: