iPhone Wireless Sync and iTunes remote management
My understanding is that you must be on your computer to select which media you want transferred to the device. After manually dragging media to your device or setting up what should be transferred under the correct tabs (i.e Music, Videos, etc.), you must then initiate a sync. I believe wifi sync to be, in short, the same as a USB sync, only over wifi instead of USB, minus a few features such as restoring a backup.

One note - you have probably already figured this out, but after your phone is plugged into USB, don't eject it, just unplug it. Wifi sync will work properly if just unplugged and not ejected.