Which 3rd Party Software to use for real time transcoding?

This thread is intended to have collective information about which 3rd Party Software Package to use for real time transcoding. First one may ask, why do I need real time transcoding? The answer... there are many different types of video's out there, most videos that you buy either through iTunes or Amazon VOD are Mpeg encoded with AC3 audio, they usually come with a .mp4 extension. For those more savy we get our HD content in x264 or h264 with 5.1 AC3 audio and they have a .mkv extension. Unfortunately our DTV receivers can not play all of these different types of encoded videos, so we much transcode them on the fly in order to watch them.

What does transcoding require?

First things first if you are wanting to transcode big movies in HD weather 720p or 1080p you will need a powerful CPU, I've yet to find a solution that actually uses the GPU for decoding video, ideally GPUs (Video card processor) handle decoding tasks much more efficiently. Since this isn't a solution right now we must rely on having a power CPU. This mean multi-core with at least a 2.0ghz clock. I've tried a single core Pentium 4 at 4.0 ghz and it simply was not enough juice to keep up.

Second thing you will need is software that knows how to transcode and send the data over the network to your DTV receiver. Right now we have a few different options, some are free and some are paid solutions, most do not advertise that they work with DTV receivers. I will list the 2 I have tried and give my opinions and experiences. I hope that others will do that same and post what there setup is and what they usually transcode.

My setup:

Currently I've been trying to get this to work with an older system I have, this system houses about 6 hard drives with all my movies, pictures, and music. System specs are:

Pentium D 2.8ghz 2GB of RAM 800mhz FSB Windows 7 Ultimate 64bit

Wired network throughout the house 100MB

I have the newest receivers HR24-500 and the H24-100.

Software #1 (in no particular order)

Tversity:

Setup seemed simple enough, you install the software and install the codec pack that comes with it. However I encountered several problems playing mkv files which were encoded in x264 and have AC3 audio. Since 80% of my library was in this format I needed to fix this. I followed several steps to resolve this problem and this is what I have come up with that works: