WiFi signal only needed to Launch Ustream, then go ahead and stream over 3G
here's another way that works, even without a jailbroken phone:
it seems you only need a WiFi signal to first LAUNCH Ustream without it complaining. once it's launched, if you lose the WiFi signal and iPhone switches to 3G, it will then stream just fine over 3G, if you don't quit the app.
I tried the following
1) connect to WiFi network, launch Ustream and stream video. Leave the house and eventually WiFi signal is lost - stream is broken & it waits on the "Buffering 0%" message.
Now, go back to channel listing (now 3G is active), and select again - stream works over 3G!
2) plug in AirPort Express, but don't plug in Ethernet cable. Connect iPhone to the wireless network, but note: NO internet connection.
Launch Ustream - launches fine, but it complains of a Service Error, unable to connect to server, timeout error. Asks you to Retry or Confirm.
Then unplug APx, wait for 3G indicator to come back on the iPhone (while still waiting in UStream). Now click Retry - channels and streams load correctly over 3G!
so it seems the only important thing is for the Ustream app to SEE an active WiFi network (an not necessarily even an internet connection) to launch fully and be ready to stream.
I assume the same should work if you're out around town and temporarily connect to a WiFi hotspot before launching Ustream
note: the times I've tried this, after 10 minutes or so Ustream crashes. not sure if it's related to 3G streaming or not...