Does photo stream save onto my computer or stream?

when i have photo stream turned on on iphoto, i think it's actually saving the files on my computer. i checked this by going to File Reveal in Finder.
I thought this was suppose to be streaming? why else would it have the little wifi type icon on the bottom left of the photos in iphoto?
this seems redundent on my computer. basically, every photo i take on my photo or even import to iphoto, gets doubled.
so now i have a photo album that i made on iphoto after importing pictures from my nikon. so it saved it on iphoto, then updated it to photo stream. so now i have a copy of each of those photos twice now on my computer. this is taking up a lot of space.
is this right? or am i completely wrong?

I share your frustrations with Photo Stream. While it is great for quickly accessing random photos on other devices, it makes proper photo management a pain. The same photo easily ends up in both the Camera Roll and Photo Stream iOS folders, as well as in the Photo Stream section of iPhoto, AS WELL as in an iPhoto event called [month] Photo Stream".
Deleting the photo from the Camera Roll does not delete the photo and vice versa, so deleting a photo is troublesome. And by creating monthly photo stream folders it makes it hard to maintain a nice event-sorted photo album.
The alternative I employ is to have migrated to Google's Picasa (not just to fix this issue but also from general annoyances with iPhoto and lack of online features). It does the same role as iPhoto (I.e. offline store of all photos and management/organising of them), and I sync all my photos with Picasa Web Albums which I can easily upload to from my phone/iPad/etc. Not only is my photo management sorted but I have a permanent online backup of all my photos. It also let's me share any album/photo with people which is handy. I therefore disable photo stream and upload any photos to any album I want from my phone, instantly accessible online anywhere.
This has been quite an undertaking for the last few days so I thought I'd share!

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    http://support.apple.com/kb/HT4486:
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