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Robbie have you tried adaptive streaming?
That's what most all the mainstream sites, along with many adult, use ... imho, the OP is on the right path - encode videos at multiple bit rates and use adaptive streaming.
If your point is perhaps the OP should default playback to 720x480p (and/or be very conservative with setting up adaptive streaming), I agree 100% ... best to assume the user's computer is slow / old, loaded full of crapware, etc and serve content accordingly.
However, from my understanding, the OP wants to encode videos now and not deal with it doing again for a couple of years - to only encode at 1.5 Mbits isn't going to cut it - video cards and playback software have greatly improved, even on very low end machines, and continues to as many people have come to expect HD quality video capability.
Ron
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Domagon - Website Management and Domain Name Sales
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