Update: This is now a tutorial on how to give some level of security to streaming videos if:
1) you are using Flowplayer with Apache
2) you don\'t want user
Okay I solved it! In this line:
$streamname = "http://www.mydomain.com/videos/".$streamname;
(It's not up there anymore)
I had it all wrong. All I had to do was delete this line and it worked. It will start with your baseUrl. So it was already at the 'videos' folder so the $streamname should equal just the location of the file after the baseUrl.
On a side note, this took me about a week to solve I was looking everywhere on the internet to put the pieces together. I created this into a tutorial so others won't have such a headache (hopefully!)