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I would think the biggest sticking point would be the fact that doing it serverside means you have to START with a compressed file.
That's why I decided to just do it right here and upload the files after converting during our conversion to h264 mpeg 4. Otherwise I would have had to start with a .wmv file already on the server.
Whereas I can use the big ass .avi raw files right here at home and get a much better quality streaming vid.
Of course this is for my members area stuff so it has to be the best quality possible.
If you're just throwing some promo stuff out in flash then you could probably get away with it.
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