Last year i've been trying to do this (only I needed a icecast stream instead of a file) for, say, six month. This year I used an hardware mixer, droppin' freej/icecast for VLC, and it worked in six days (live streaming included).

You can find here patch I used to make BTTV capture card work. Not my code, btw.
http://svn.mandriva.com/cgi-bin/viewvc.cgi/packages/cooker/freej/current/SOURCES/

Hardware mixer are very expensive: if you manage to make it work, let me know.


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Iron