from what i read on his site, they're not really pay streams. if you donate though, you do get a reserved slot. the donations help pay for the bandwidth they need to stream all those shows in their multiple servers, to meet current demands. non-donators can still get on, but they just have to push their way in.
maybe it's because i don't use the internet tv so much, but i really don't mind that they have a donation thing going on. aside from the anime channels, they're playing the best selection of shows right now, providing further incentive for people to run winamp.