Dino K wrote:
VLC is a realtime open source re-encoder... software based which some CDN's are utilizing, it's not real efficient but it works.

I thought about that too -- look at the software a program like VLC is using under the hood and see if it could be hooked in to a web server.

I'm guessing you'd have to roll your own solution with something like ffmpeg or mplayer.

While googling, I found this.  This is kinda cool, actually...

http://www.wonderhowto.com/how-to/video/how-to-transcode-video-under-gnu-linux-with-ffmpeg-263657/

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