i would say that you would only need the flash streaming server if you were to allow* hotlinking of videos, say trailers or something. Other wise i would say just use one of the flash players that is out right now, i would say the
http://www.jeroenwijering.com/ or
http://flowplayer.sourceforge.net/ (paided if you want to keep users from dl movies)
and for encoding every review site that i have read says to use the On2 VP6 codec for best quality.