Ok. So it seems to become more and more common to offer low, medium and highquality encodes of the video uploaded to VOD sites.

This is something I'd like to see in vshare aswell. To allow user to select which quality a video he/she uploads will be available at.
low, medium and high (h264) for example

When user selects all three types the video will be available in low, medium and high. Mencoder should support h264 output already and latest jw player will read h264 files so this is defiantely doable.

Currently there's only one option in standard vshare, and the quality is fixed (mencoder option). 500bitrate standard in flv format.
I'd like to see at least h264 aswell as supported in latest flash and jw player. Better quality, less bw usage.

Lets say you click a video link, first the low quality version shows as default. With links to the higher quality below the video screen.
Higher quality encodes could be made available only to users with higher packages for example.

Impact: More encode options will need X amount of outputted video files from mencoder. More requirment on diskspace and CPU if you output many encodes on one video.
This should be pretty easy to implement, but the upload.php file is zend obfuscated sadly :(

Another option when source to upload.php is missing (hopefully the devs of vshare will add this function later) might be to append the mencoder commandline to encode all three qualities at the same type, but still impossible to receive which encode options a user who uploads wants his video at and to index all available video qualities in a good way when source to php files are zend obfuscated.