Exactly !! And that's why I was looking at options like Android TV dongle+some transcoding app. These cheap devices with their quad-core CPUs/GPUs and 1GB RAM have enough hardware processing power for the job...the challenge is finding the right SERVER app that can do the transcoding/streaming.
Can you please elaborate? Are you running XBMC on a PC with the dvblink PVR add-in? If that's the case, what's wrong with using a VLC server on PC for transcoding/streaming (although I'd still have to figure the configs)