How do you make a render farm using Compressor?

I'm a little confused as to how Qmaster works.
I understand the part about spreading out the job over more CPUs.
But do each of the other computers need to have access to the video clips?
If so, does this only work when using an Xsan or fiber network of stored media,
where all the networked computers are also able to look at the clips?

The reason I'm confused is the PR on Apple's web site says something about
having to copy large files to each workstation, but not if you use Xsan.
Does this mean to do any distributed encoding, I first have to copy my
media files to each workstation (computer) ?

Thanks,
Dan