I think VLC supports re-encoding videos but I have no idea what options would need to be passed to VLC to make this work. My problem is I am unable to stream HD videos over the internet due to my 3.5 Mbps upload stream. DVDs are small enough that I can stream without problems however HD content just plays through the buffer, stops to rebuffer and plays again, rinse and repeat.
Any suggestions to get around this or is a faster connection the only cure?