> > There are chips for Theora?
> 
> IIRC there's a digital camera that records into Theora, but that's=20
> encoding.

An encoder chip could be useful for the sending end of the link, if one
expects to have a lot of video in formats that the decoder can't handle.

> I was thinking we would develop this chip however.

Do you (or anyone) have any thoughts on JRT's suggestion of using a
DSP chip?  The decoder needs to handle the most common formats,
mpeg at the very least, to avoid transcoding.  Transcoding takes a
lot of CPU, and Theora is lossy.
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