As I haven't got an H264-capable camera to use as a test source (yet) I'm using the following GStreamer pipeline, adapted from videotestsrc documentation to generate an endless, mildly hypnotic low bitrate zone plate pattern wrapped in an MPEG transport stream. A clock is also shown so that when the stream is transcoded and/or segmented, it's easy to see how bad the lag is. Audio is not included but for example audiotestsrc could be plugged in the pipeline if necessary (although I won't be using audio in my app). VLC is used in the end of the command line to serve the stream over HTTP.
Well, it took "a while" but I finally got HTTP Live Streaming working with VLC. Downloading and compiling the latest from Videolan's Git repo was required ("1.2.0-git Twoflower" here). I might add that even though on the box that I did this I've compiled a lot of different programs (an Ubuntu installation that has gone through multiple dist-upgrades so it's a few years old and has a lot of packages (2344 atm) installed), quite a few external -dev packages relating to audio and video had to be apt-get'ed to make things work.
Below is the command to make VLC read a DVD and generate a segmented stream of H264 video and AAC audio to directory /var/www/html-video-stream/x/ on our local web server. In an IRL situation we would perhaps run the transcoder and segmenter instances on separate machines, or if we already had a suitable H264 stream source (like a camera) we could skip the transcoding step altogether.
QuickTime X (fanboys have had this since Snow Leopard) supports HTTP Live Streaming, so in order to show the above stream on a web page in Safari using the <video> tag, we can do the following:
Although I'm not sure if this will work in a situation where we attempt to feed H264 to clients that don't support HTTP Live Streaming, that is, we have an additional <source> element that points to a "regular" H264 HTTP stream. However, adding Ogg/Theora and WebM/VP8 support should not cause problems – I just haven't been able to make VLC output those (properly) yet. HTML5 video tag streaming support in different browsers is also one big question mark.