Upstream means data channel from source system to ETL. There are verity of source system (RDBMS, Flat Files, XML, ODBC).this data is integrated by ETL.this is input to ETL. same as upstream.
Downstream means data generated from ETL.
Say a Transformation1 accepts input from transformation 2 and passes the output to a transformation 3 , then transformation 2 is called an upstream transformation and transformation 3 is called a downstream transformation.