So I installed Darwin Streaming Server to play with mp4 and H.264, but it didn't go further then audio - DSS refuse to RTSP stream mp3 apparently because it is not hinted. Neither does it stream mp3 wrapped into mp4 container even with hint track.
DSS has no problem however streaming AAC with hint in mp4 container, but doom9.org way of creating AAC using AACMachine is cludgy as hell.
Here there is a list of other posibilities when it comes to encoding mp4. And here is the list of audio encoders and video encoders.
I guess the next step would be to try FAAC/FAAD with winamp5 and then Nero for audio encoding and then (once Nero is installed) try to encode with MeGUI.
P.S. mplayer cannot play neither AAC nor mp4, not to mention that RTSP streaming ain't working either.