Took me _ages_ to work out how to do this with VLC, so I thought it was worth writing it down, in the hope that the Google crawler will pick it up and help other people out.
- In VLC pick your source (File, Capture device, etc) and then check the ‘Stream’ option and open the settings dialogue.
- Select MMS as the output format, and choose a port (I used 8080). You don’t need to put in an IP
- Use the default MPEG TS encapsulation
- Transcode to WMV1 video and MP3 audio – set whatever other compression/bitrate settings you want here.
- Hit OK, and then OK again, and it should start playing
- Point WMP at mms://<your-ip-here>:8080/ and it should pick up the stream, buffer and then play. Hurrah!
Hopefully somebody somewhere will find this useful 
mrBen
My Hero!!
Thanks for the superb tip, been stuck on this for hours.
Thanks a lot, I wish there were more step by step guides for the vlc out there.
Brilliant thanks was just about to give up
Thanks! A lot! Works just grat!
Very Good extremely useful..
I want to know how to stream it on mobile handsets on http:\\
I would be very grateful..
Thank You once again
Thanks. 2 years later, and your still helping.
when u go on capture device for the first time, can others see you or do you have to set it first? thanks
I can’t say I’ve ever tried it with a capture device – I’ve used it for forwarding other types of video. However, others won’t be able to see you until you’ve started the stream.