I am working for a company where we are developing video chat support on an existing application. I have looked at various solutions for this like
Save yourself the trouble and use VLC. There are some decent .NET wrappers for it (http://forum.videolan.org/viewtopic.php?f=32&t=52021&start=30)
We are using C# and VLC for an IPTV network. We take input off DISH network satellites via Osprey-450 video capture devices on a Windows XP server. From there, we have a .NET server component that we wrote in C# that uses VLC behind the scenes (starting separate processes in .NET to control the vlc.exe instances). The VLC processes transcode and stream the signals over a network (.h264 or MPEG-4, we've successfully done both).
On the client side we have a C# WinForm application that uses an embedded VLC Viewer to view multicast signals. This application is mainly for command & control. The real use of the multicast signals happens when our set top boxes attached to our TV's decode and display the streams.
We thought we were going to have to write our own DirectX encoders too, but don't go to all the trouble. VLC works really well and has enough C# support to be very useful. Feel free to e-mail me if you have specific questions about implementation.