VOD / Media Server - I really need help

[iSlaker]

if i write a little bit too long, please read the parts in bold as they will be the main points.

i've been working on a personal project for a few weeks: a media server. i am a windows server administrator and ASP/VB programmer but I knew that for this i would have to go into different realms and now I am trying to deploy my project on a Linux server - and I am personally enjoying it.

the project is a media server, mainly for mobile phones. I have made the interface and it's currently working for audio only. the audio part of the thing is running on a windows server.

what i need help mainly is the video part: as due to storage restrictions it is physically impossible to keep different versions of all the videos in the server. my idea was a transcoding on demand server running on linux. i have seen many "out of the box" solutions on the web such as Orb but they don't seem to have two quite important features for my project:

1) the ability to give each file a unique URL
2) the ability to transcode this file everytime it's accessed.

what i've done so far:
a. i started playing with VLC on Windows 7, some things worked, some things not. the web interface never worked no matter what I tried but I did get to connect to vlc via telnet. I did manage to get something out of it but the "VOD" didn't work. the video was being streamed as a broacast and finished at the end.
b. I started playing with VLC on Ubuntu 9.04. that was even less successful, however, I did get the web interface to work whereas the telnet interface didn't - how ironic.
c. on Linux, I did not get a single blink of image as the log keeps reporting that the FFMPEG package is crippled even after installing all possible packages I found, including the ones downloaded directly from the FFMPEG site

after two days trying everything possible with the VLC, I come to realise that a big amount of the documentation appears to be outdated which just makes things harder.

what I'm trying to understand:
1) why when you start the server it always has to be --rtsp-host 0.0.0.0:5554 - why rtsp and why 5554? (I'll stream in http)
2) VOD: has anyone really seen this thing working? it ALWAYS function as a broadcast here.
3) what's that VLM Configuration window in the Tools menu for? that doesn't work at all either for Win or Linux.
4) how VLC knows that there's a client requesting content?
5) is the client supposed to connect directly to VLC or the client has to go through a server? if so, how??

guys, any help is more than welcome. it can be either to help me with VLC or point me to another direction if anyone thinks VLC might not be right tool for my project.