Streaming CPU max out

[hcope]

I'm trying to stream a webcam capture with the following specs but 2 cpu cores max out at 100%:
intel core 2 @ 2.4ghz
8gb RAM
Windows Vista 64bit
VLC 1.1.7
Webcam output: 800x600 25fps

:sout=#transcode{vcodec=x264,vb=600,width=800,height=600,fps=25, acodec=mp3,ab=128 ,channels=2,samplerate=44100}:rtp{dst=127.0.0.1,port=5544,mux=ts} :no-sout-rtp-sap :no-sout-standard-sap :ttl=1 :sout-keep

I can stream with the same transcoding specs using Flash Live Media Encoder in addition to 2 more lower bitrate streams with 60-70% cpu utlization. VLC chokes with just one....
Any advice on how to improve transcoding and cpu utilization would be much appreciated