A stream is a way of sequentially accessing a file. A byte stream access the file byte by byte. A byte stream is suitable for any kind of file, however not quite appropriate for text files. For example, if the file is using a unicode encoding and a character is represented with two bytes, the byte stream will treat these separately and you will need to do the conversion yourself.
A character stream will read a file character by character. A character stream needs to be given the file's encoding in order to work properly.
Although a Microsoft Word Document contains text, it can't be accessed with a character stream (it isn't a text file). You need to use a byte stream to access it.
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