Yes, we encode it on the fly: Abit I-N73HD motherboard with overclocked 
Intel Pentium E2160 processor. Working like a charm, about 50-60% 
loading  of the each of processors.
Here is my encoding line:
(Middle quality)
cat $OUT.avi & /usr/bin/mencoder "$IN"  -vf scale=512:384 -ovc x264 
-x264encopts bitrate=300:threads=auto  -oac lavc -lavcopts 
acodec=aac:abitrate=20  -o $OUT.avi &>$OUT.log

High quality:
cat $OUT.avi & /usr/bin/mencoder "$IN"  -vf scale=512:384 -ovc x264 
-oac lavc -lavcopts acodec=aac:abitrate=20  -o $OUT.avi &>$OUT.log


>> We (me and my friend from the States) have the following problem. My 
>> friend wants to watch tv programs from Europe, which I stream to him. 
>> Because my upload is not too big (about 0.5 megabits) we used 
>> externremux script together with stream-device plugin for vdr to encode 
>> stream with h264 codec and after that stream it into internet. 
> do you encode mpeg2 satellite channels to h.264 on the fly ? It seems to me 
> it's very hard job for CPU
> or do you stream in Internet h.264 dvb-s2 channels ?
> Igor 
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