Sadly, my joy was premature.
Although the qt-faststart code fixes the ffmpeg-generated files (they will now play through iTunes video sharing), my test video was a paltry 1.5 mb xvid mp4. When I tried with a larger, 80 mb file, iTunes hung again… for approximately the amount of time that it would take to download that file in entirety. I only didn’t notice the downloading of the file with the small test video. I believe that iTunes may require something else in the video file that qt-faststart doesn’t supply (hinting, perhaps?).
Again, these files are playing fine locally.
I’m going to take a closer look at the video format created by QTPro’s “Export to iPod” functionality. I think it’s encoding to H.264, which I may need to switch to (sigh).
Again, if anyone has successfully encoded mpeg2 video to mp4 on Linux and streamed it over iTunes video sharing, please let me know your method.