Bitstreaming - Transferring undecoded audio formats, like the various versions of DD or DTS, from a disk player via digital interconnect (optical/coax/HDMI) for decoding in another component, usually the A/V receiver.
Lossless codec - Digital audio format(s) (Dolby TrueHD, DTS-HD/Master) that, when decoded (decompressed), are a bit-for-bit exact copy of the original master. Unlike lossy codecs (DD/DTS/DD+), which undergo some loss of data when compressed from the original master. Lossless codecs take up more space than lossy, and are only seen on Blu-ray disks.
So Bitstreaming lossless codecs means a player can transfer Dolby True HD and/or DTS-HD/Master for decoding in the receiver, instead of decoding in the player. Bitstreaming of lossless codecs can only take place over an HDMI connection.