Here's a short description of what I have: 
I have to raspberry pi's in a local net work. I one of them I have a .py script named watchdog.py that starts a stream and then uses a sshpass command to the other pi to display the video stream.It also has some signaling LEDs a some push buttons for control
 the problem is:
If I open a terminal and run the watchdog.py script  in the GUI everything runs as it should be. So I thought of running it as a service as boot and installed upstart and made it run as a service (successfully I think). The thing is. If I boot the pi and then press the button to start the streams,they wont play on the other Pi, the LEDs ligh up and all the buttons work. And even the CPU load behaves the same way, but i still don't video nor audio. I have thought of trying automatically open a terminal (LXterminal) widow and run the python scrip on that window. but I didn't want the streaming raspberry pi also booting into gui (tough I guess I would mind if that makes the whole thing work).This little thing i making the whole project useless.
What are you using to play the streams? Depending on how you boot up the second Raspberry it might not have started some daemons for audio/video playback?!
You should (if you're not already doing) write a log (import logging ;)) and write a logfile which you can track for errors.
Run terminal command as startup reacts different from manually (linux raspberry pi)