Can't get MPEG2 streaming

[dimX]

Hi all

I'm having problem receiving MPEG2 streaming video.
I'm using VLC to stream out from a VGA capture card via directshow Below is the transcode:
:sout=#transcode{vcodec=mp2v,vb=8000,fps=30,scale=1,width=800,height=600,acodec=none}:rtp{sdp=rtsp://:5544/v1.sdp} :no-sout-rtp-sap :no-sout-standard-sap :sout-keep

From the receiving PC, I see corrupted video. This is the message log:

qt4 warning: Input option: rtsp-caching=1
main debug: adding item `rtsp://192.9.1.187:5544/eoir1.sdp' ( rtsp://192.9.1.187:5544/eoir1.sdp )
main debug: rebuilding array of current - root Playlist
main debug: rebuild done - 1 items, index -1
main debug: processing request item rtsp://192.9.1.187:5544/eoir1.sdp node null skip 0
main debug: resyncing on rtsp://192.9.1.187:5544/v1.sdp
main debug: rtsp://192.9.1.187:5544/v1.sdp is at 0
main debug: starting new item
main debug: creating new input thread
main debug: Creating an input for 'rtsp://192.9.1.187:5544/v1.sdp'
qt4 debug: Adding a new MRL to recent ones: rtsp://192.9.1.187:5544/v1.sdp
main debug: thread (input) created at priority 1 (../.././src/input/input.c:214)
main debug: thread started
main debug: using timeshift granularity of 50 MiB
main debug: using timeshift path 'C:\DOCUME~1\YWHE~1\LOCALS~1\Temp'
main debug: `rtsp://192.9.1.187:5544/v1.sdp' gives access `rtsp' demux `' path `192.9.1.187:5544/v1.sdp'
main debug: creating demux: access='rtsp' demux='' path='192.9.1.187:5544/v1.sdp'
main debug: looking for access_demux module: 1 candidate
qt4 debug: IM: Setting an input
live555 debug: RTP subsession 'video/MPV'
main debug: selecting program id=0
live555 debug: setup start: 0.000000 stop:0.000000
live555 debug: We have a timeout of 60 seconds
live555 debug: spawned timeout thread
live555 debug: play start: 0.000000 stop:0.000000
main debug: using access_demux module "live555"
main debug: TIMER module_need() : 290.000 ms - Total 290.000 ms / 1 intvls (Avg 290.000 ms)
main debug: looking for decoder module: 34 candidates
avcodec debug: libavcodec initialized (interface 0x344d00)
avcodec debug: trying to use direct rendering
avcodec debug: ffmpeg codec (MPEG-1/2 Video) started
main debug: using decoder module "avcodec"
main debug: TIMER module_need() : 51.000 ms - Total 51.000 ms / 1 intvls (Avg 51.000 ms)
main debug: thread (decoder) created at priority 0 (../.././src/input/decoder.c:301)
main debug: thread started
main debug: looking for meta reader module: 2 candidates
lua debug: Trying Lua scripts in C:\Documents and Settings\YWHE\Application Data\vlc\lua\meta\reader
lua debug: Trying Lua scripts in C:\Program Files\VideoLAN\VLC\lua\meta\reader
lua debug: Trying Lua playlist script C:\Program Files\VideoLAN\VLC\lua\meta\reader\filename.lua
main debug: no meta reader module matching "any" could be loaded
main debug: TIMER module_need() : 2.000 ms - Total 2.000 ms / 1 intvls (Avg 2.000 ms)
main debug: `rtsp://192.9.1.187:5544/v1.sdp' successfully opened
main debug: Buffering 0%
main debug: Stream buffering done (33 ms in 0 ms)
avcodec warning: cannot decode one frame (41666 bytes)
main debug: Decoder buffering done in 0 ms
avcodec warning: cannot decode one frame (41667 bytes)
main debug: no usable vout present, spawning one
main debug: looking for text renderer module: 2 candidates
freetype debug: Building font databases.
freetype debug: Took 18000 microseconds
freetype debug: Using Arial as font from file C:/WINDOWS/fonts/arial.ttf
freetype debug: using fontsize: 2
main debug: using text renderer module "freetype"
main debug: TIMER module_need() : 32.000 ms - Total 32.000 ms / 1 intvls (Avg 32.000 ms)
main debug: looking for video filter2 module: 18 candidates
swscale debug: 32x32 chroma: YUVA -> 16x16 chroma: YUVA with scaling using Bicubic (good quality)
main debug: using video filter2 module "swscale"
main debug: TIMER module_need() : 4.000 ms - Total 4.000 ms / 1 intvls (Avg 4.000 ms)
main debug: looking for video filter2 module: 18 candidates
yuvp debug: YUVP to YUVA converter
main debug: using video filter2 module "yuvp"
main debug: TIMER module_need() : 20.000 ms - Total 20.000 ms / 1 intvls (Avg 20.000 ms)
main debug: window size: 800x600
main debug: Deinterlacing available
main debug: deinterlace 0, mode blend, is_needed 0
main debug: looking for video output module: 1 candidate
vout_wrapper debug: Opening vout display wrapper
main debug: looking for vout display module: 8 candidates
directx debug: creating Vout EventThread
directx debug: DirectXCreateWindow
main debug: looking for vout window hwnd module: 3 candidates
qt4 debug: requesting video...
qt4 debug: Video was requested 0, 0
main debug: using vout window hwnd module "qt4"
main debug: TIMER module_need() : 52.000 ms - Total 52.000 ms / 1 intvls (Avg 52.000 ms)
directx debug: created video sub-window
directx debug: Vout EventThread running
directx debug: disabling screen saver
directx debug: directx-device:
directx debug: DirectXEnumCallback: Mobile Intel(R) 965 Express Chipset Family, \\.\DISPLAY1
directx debug: selecting Mobile Intel(R) 965 Express Chipset Family, \\.\DISPLAY1
directx debug: screen dimensions (0x0,1280x800)
directx debug: DirectDraw Capabilities: overlay=1 yuvoverlay=1 can_deinterlace_overlay=1 colorkey=1 stretch=1 bltfourcc=1
main debug: VoutDisplayEvent 'resize' 808x627 window
directx debug: YUV overlay surface created successfully
main debug: using vout display module "directx"
main debug: TIMER module_need() : 122.000 ms - Total 122.000 ms / 1 intvls (Avg 122.000 ms)
main debug: using video output module "vout_wrapper"
main debug: TIMER module_need() : 123.000 ms - Total 123.000 ms / 1 intvls (Avg 123.000 ms)
main debug: got 1 direct buffer(s)
main debug: pic render sz 800x600, of (0,0), vsz 800x600, 4cc I420, sar 1:1, msk r0x0 g0x0 b0x0
main debug: pic in sz 800x600, of (0,0), vsz 800x600, 4cc I420, sar 1:1, msk r0x0 g0x0 b0x0
main debug: pic out sz 800x600, of (0,0), vsz 800x600, 4cc I420, sar 1:1, msk r0x0 g0x0 b0x0
main debug: direct render, mapping render pictures 0-23 to system pictures 1-24
avcodec debug: using direct rendering
main debug: End of video preroll
main error: picture to display 0192bbcc has invalid status 2
main error: picture to display 0192bbcc has invalid status 2
main debug: VoutDisplayEvent 'resize' 800x600 window
freetype debug: using fontsize: 37
main error: picture to display 0192bbcc has invalid status 2
main debug: looking for video blending module: 1 candidate
main error: picture to display 0192bbcc has invalid status 2
blend debug: chroma: YUVA -> I420
main debug: using video blending module "blend"
main debug: TIMER module_need() : 1.000 ms - Total 1.000 ms / 1 intvls (Avg 1.000 ms)
main debug: Post-processing available
main warning: vlc_object_find_name(postproc) is not safe!
main error: ES_OUT_SET_(GROUP_)PCR is called too late (pts_delay increased to 1 ms)
main error: ES_OUT_RESET_PCR called
main debug: Buffering 0%
main debug: Stream buffering done (33 ms in 33 ms)
main debug: Decoder buffering done in 0 ms
main debug: End of video preroll
main error: picture to display 0192be0c has invalid status 2
main error: picture to display 0192be0c has invalid status 2
main error: picture to display 0192be0c has invalid status 2
main error: picture to display 0192be0c has invalid status 2
main error: picture to display 0192be0c has invalid status 2
main error: picture to display 0192be0c has invalid status 2
main error: picture to display 0192be0c has invalid status 2
main error: picture to display 0192bbcc has invalid status 3
main error: picture to display 0192bbcc has invalid status 3
main error: picture to display 0192bbcc has invalid status 3
main error: picture to display 0192bbcc has invalid status 3
main error: picture to display 0192bbcc has invalid status 3
main error: picture to display 0192bbcc has invalid status 3
main error: picture to display 0192bbcc has invalid status 3
main error: picture to display 0192bbcc has invalid status 3
main error: picture to display 0192bbcc has invalid status 3
main error: picture to display 0192bbcc has invalid status 3
main error: picture to display 0192bbcc has invalid status 3
main error: ES_OUT_SET_(GROUP_)PCR is called too late (pts_delay increased to 1 ms)
main error: ES_OUT_RESET_PCR called
main debug: Buffering 0%
main debug: Stream buffering done (33 ms in 32 ms)
main debug: Decoder buffering done in 0 ms
main error: ES_OUT_SET_(GROUP_)PCR is called too late (pts_delay increased to 1 ms)
main error: ES_OUT_RESET_PCR called
main debug: End of video preroll
main warning: early picture skipped
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Buffering 0%
main debug: Stream buffering done (33 ms in 56 ms)
main debug: Decoder buffering done in 0 ms
main error: ES_OUT_SET_(GROUP_)PCR is called too late (pts_delay increased to 22 ms)
main error: ES_OUT_RESET_PCR called
main debug: Buffering 0%
main debug: Stream buffering done (33 ms in 35 ms)
main debug: Decoder buffering done in 0 ms
main debug: End of video preroll
main error: picture to display 0192bbcc has invalid status 2
main error: picture to display 0192bbcc has invalid status 2
main error: picture to display 0192bbcc has invalid status 2
main error: picture to display 0192bbcc has invalid status 2
main error: picture to display 0192bbcc has invalid status 2
main error: picture to display 0192bbcc has invalid status 2
main error: picture to display 0192bbcc has invalid status 2
main error: picture to display 0192bbcc has invalid status 2
main error: picture to display 0192bbcc has invalid status 2
main error: picture to display 0192bbcc has invalid status 2
main debug: auto hidding mouse


Anyone can tell me what is the problem here?
Compared to MPEG4 and H.264, MPEG2 should be a less compressed format. I'm seeing the quality of the locally displayed MPEG2 is not as good as MPEG4 and H.264. Is this correct? Thank you so much.

Regards
dimX