Need reccomendation for best streaming quality

[JHT]

I have 2 Windows 7-64 PCs, 1 with a Datapath capture card as the source to set up streaming a 1920x1080p signal from the capture card with VLC as a stream server,
and the other with VLC player to show what is being captured on PC1.
I have it working with HTTP and transcoding with MPG2 + MPGA (TS), but the quality is bad.
My question is what is the best way to set up protocol and transcode with best image quality? CPU consumption doesnt matter.

Thanks so much for any insight

[pk21x]

hey mate.. have you tried mpeg-ts with h264 codec?