I had the same problem but finally I found the way.
Here is the walk through:
1- Install VLC on your computer (SERVER) and go to Media->Streaming (Ctrl+S)
2- Select a file to stream or if you want to stream your webcam or... click on "Capture Device" tab and do the configuration and finally click on "Stream" button.
3- Here you should do the streaming server configuration, just go to "Option" tab and paste the following command:
:sout=#transcode{vcodec=mp4v,vb=400,fps=10,width=176,height=144,acodec=mp4a,ab=32,channels=1,samplerate=22050}:rtp{sdp=rtsp://YOURCOMPUTER_SERVER_IP_ADDR:5544/}
NOTE: Replace YOURCOMPUTER_SERVER_IP_ADDR with your computer IP address or any server which is running VLC...
NOTE: You can see, the video codec is MP4V which is supported by android.
4- go to eclipse and create a new project for media playbak. create a VideoView object and in the OnCreate() function write some code like this:
mVideoView = (VideoView) findViewById(R.id.surface_view);
mVideoView.setVideoPath("rtsp://YOURCOMPUTER_SERVER_IP_ADDR:5544/");
mVideoView.setMediaController(new MediaController(this));
5- run the apk on the device (not simulator, i did not check it) and wait for the playback to be started. please consider the buffering process will take about 10 seconds...
Question: Anybody know how to reduce buffering time and play video almost live ?