I don't see any LIVE555-related problems here; you're going to have 
to ask a VLC mailing list for help.

Anyway, I suspect that you're mainly seeing network packet loss. 
Note that JPEG is not a very efficient codec for network streaming. 
If network bandwidth is a problem, then other codecs (e.g., MPEG-4, 
H.264) are much better.
-- 

Ross Finlayson
Live Networks, Inc.
http://www.live555.com/
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