In your case it all seems to boil down to the up speed of your connection, the type of file, resolution and container you are trying to stream.
VPN does have its own overhead when used over a standard Internet connection. As such may not be the best choice.
As for as your router, the best bet, to get all the configurations correct and get you familiar with VLC, would be setting the router for the DMZ for what ever machine you are using for the server. After you get it to work you will need to figure out the particular settings for port forwarding as the DMZ offers no security. It is also suggested that you get used to local streaming before you try Internet streaming.
I wrote this a few moments ago and have now used it 4 times for related questions.
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While I believe that any format should be compatible with any container and all containers should be capable of streaming, that's not how it is in the real world. This is why the Wizard was created.
The key issue is:
1. know your compatible formats and containers.
2. Separate transcoding from streaming when you have problems.
3. Know your source file types and the containers so you can make intelligent decisions for quality with relatively low overhead when transcoding files for streaming.
I can not in this space tell you what is ideal in every situation, that is why there are options. At the same time I can not tell you which ones don't work together as some of these were never finished (they do work but perhaps not as expected), so that all the accepted variations for all the various formats and containers would work together.
Hint: mp3 audio is not accepted with any video format in any container, however mpga is accepted for most mpeg formats including mp4v and DivX. MP4a (AAC) audio is accepted with MP4v in a MP4 or MOV container as this is a standard QuickTime format. But for streaming MOV is the container of choice.
