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?).
I don’t belive iTunes does streaming at all. I think it always pulls the whole file and then plays it locally. That’s why there is no motion on doing server side video transcoding.
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).
Your contention is that h.264 *does* stream? That would be news to me, and welcome to hear.