Update 2016
BT Wholesale has now migrated most of their exchanges to their 21CN network. Both IPStream and Datastream has been withdrawn for new purchase and these products have been replaced by WBC and WBMC.
The new backhauls run over ethernet (rather than using ATM) and have much larger S-VLANs compared to the old VPs.
The information below has been retained for historic reasons. The diagram still applies on a simplistic level, except now their are VLANs and WDM backhauls to the Core network.
IPStream.
Although both IPStream and DataStream are both provided by BTWholesale
(BTw), the majority of ISPs use IPStream to deliver adsl to their
customers
With IPStream most of the adsl connection and routing is the responsibility
of BT wholesale (BTw).
BT IPStream currently offers 2 levels of contention: 20:1 Office
or 50:1 Home.
(update Nov - 2005 BTw have now withdrawn all mention
of contention ratios and have announced up to 8Mbps roll out)
Available speeds are 256kb, 512kb, 1Mb and 2Mb.
Maximum upstream for all connection types is 256 kbps.
Below is a diagram of a typical IPStream setup where you can see
that most of the routing is managed by BTw.

DataStream
A BTw product whereby the ISP rents a VP/ports at the local exchange,
although they will likely use the same DSLAM as IPStream.
DataStream traffic will traverse from the exchange down the ATM
backhaul to a PoP where it will join either the ISP's own fibre network
or other telco carriers such as telefonica or NTL.
The point at which this would occur in comparison to the above IPStream
diagram is somewhere within the ATM cloud.
Datastream allows an ISP more flexibility over contention ratios
and speeds, since these are normally controlled at the VP (contention)
or on the line card (speed), although speed can be controlled
at the ISP end too.
Local Loop Unbundling (LLU)
Another BTw product, only this time the ISP has some control over
the
"copper pair" (patch panel level in the above diagram).
An LLU ISP will have all their own equipment in the exchange and
provide their own backhaul direct on to their network.
Because of the huge costs involved in putting in their own equipment
in the exchange, comparatively few exchanges are LLU enabled
and are mostly centered around large cities.
There is also a fully unbundled LLU service whereby the ISP can
also take control and responsibility over the phone line.
Theres more information about LLU and LLU equipment - Inside the telephone exchange - LLU
So why the IPStream-v-DataStream debate?
In theory both IPStream and Datastream users should see no difference
between their types of connection
Datastream has much more flexibility and should be able to offer the
consumer more choice such as lower contention levels and different
speeds. However this does not appear to have been the case and there
have been some disastrous tales of woe regarding latency and contention
issues.
As has previously been mentioned the contention on IPStream products
is handled by BTw at the exchange, and its partially down to the numbers
game and percentages.
A typical IPStream VP of 10MB may have a couple of hundred users
sharing the bandwidth, and there is less likely hood of a few hundred
users all wanting to do the same thing at the same time.
If by any chance IPStream users start to feel the effects of contention,
there is likely going to be a fair few people complaining to their
ISPs who in turn will complain to BTw.
On the whole BTw are pretty good at managing contention at the exchange
and they monitor their VP's for signs of problems and do something
about it if things get too bad. - You can check out your exchange
status here.
However a typical 2MB datastream VP can in theory hold up to a maximum
of 200 x 512kb connections, or 100 x 1Mb users
or 50 x 2Mb users or a combination of all
speeds.
To simplify things lets imagine that a datastream ISP has rented
a 2Mb VP which would have up to 100 ports to support 100 x 1Mb users
(100 x 1Mb at 50:1). This ISP has paid for the VP and therefore wants
to put as many users as possible onto the VP to maximise their profits.
User 1 signs up with the ISP for a 1Mb connection and has a nice
new shiny 2Mb VP all to themselves... speeds are good and he is
happy... User 2 signs up for another 1Mb connection... things are
still good.... User 3 signs up... now we have 3 x 1Mb users all
sharing the same connection, its hardly likely that all 3 will max
out at the same time so things are still cool... User 4, User 5,
User 6, and its now likely to start seeing some slow downs.... and
things soon then start to get worse.
This is exactly what happened with Bulldog datastream, their users
had 2Mb connections on a 2Mb VP and things very soon turned sour.
Tiscali also had major problems. Some ISPs that tried Datastream
went back to using IPStream.
Where does that leave us today? Well the mention of datastream leaves
a nasty taste in many peoples mouths, but there are some new ISPs
that are coming onto the market using datastream thinking its a way
of providing cheap adsl. But the question is, how many users are they
going to cram on their VP's and what effect will it have on their
users connections :-/
How can I check if I am on IPStream or
DataStream?
The simplest way would be to see if you can perform the bt_test_user@startup_domain
test, if you can log in then you are on a IPStream product.
Change your login on your modem/router to
username: bt_test_user@startup_domain
password: "anything"
You may also be able to check from your online BT Bill which service
you use:-
From http://www.bt.com/youraccount