There are two approaches, i mean other than simple html5 which we find really limiting.
Approach one is live streaming, but really writing a transcoder/segementer is a pain unless your dealing with a single format to convert, I known, I've been there.
Approach two is to decode on the device, which is the approach we take, our app works with various dlna servers, including playon which allows us to offer Hulu over a wifi connection. Apple probably won't let us stream over 3g. They are kind of evasive when you broach the issue.
But the one interesting aspect of our approach is that mpeg2 decoding provides much cleaner and clearer output than h264 under many conditions.
Tuesday's v episode looks great on an ipad for instance.
Why am I posting , I am not a lurker... looking over the boxee api and how you are actually doing your streaming we realize with just a little bit of restructure a varient of the application we have under development could used as a boxee client for the iphone. Most of our project is and will always be open source and we invite boxee developers to look at our code because it could definitely provide a headstart.