H264 rtmp poor video quality compared to VLC play

Hi!
I have Flash Media Server 4.
Video is and MP4 wrapped H264 at 2Mbps 720x576.
Playing the video with VLC player or any other player the quality is fine and very good!
Same file streamed from FMS4 (same on 3.5) with rtmp protocol has very poor quality compared to real file quality.
Is there some low level configuration to do on Flash Server?
Is the streaming server making some kind of transcoding before sending the stream?
Or it can be Flash Player? Tried unchecking "hardware acceleration" but nothing changes.
I am on a local gigabit network, so no network bottlenecks.
Video seems very pixelated on the edges (not soft/antialiased).
These are the file details:
General
Complete name                    : C:\Users\camillo\Desktop\00026C39.mp4
Format                           : MPEG-4
Codec ID                         : M4V
File size                        : 7.03 MiB
Duration                         : 30s 37ms
Overall bit rate                 : 1 964 Kbps
Encoded date                     : UTC 2011-04-08 13:33:31
Tagged date                      : UTC 2011-04-08 13:33:31
Video
ID                               : 1
Format                           : AVC
Format/Info                      : Advanced Video Codec
Format profile                   : [email protected]
Format settings, CABAC           : Yes
Format settings, ReFrames        : 3 frames
Codec ID                         : avc1
Codec ID/Info                    : Advanced Video Coding
Duration                         : 30s 0ms
Bit rate mode                    : Variable
Bit rate                         : 1 455 Kbps
Width                            : 688 pixels
Height                           : 544 pixels
Display aspect ratio             : 5:4
Original display aspect ratio    : 16:9
Frame rate mode                  : Constant
Frame rate                       : 25.000 fps
Standard                         : PAL
Color space                      : YUV
Chroma subsampling               : 4:2:0
Bit depth                        : 8 bits
Scan type                        : Progressive
Bits/(Pixel*Frame)               : 0.155
Stream size                      : 5.20 MiB (74%)
Language                         : English
Encoded date                     : UTC 2011-04-08 13:33:31
Tagged date                      : UTC 2011-04-08 13:33:31
Color primaries                  : BT.470-6 System B, BT.470-6 System G, BT.601-6 625, BT.1358 625, BT.1700 625 PAL, BT.1700 625 SECAM
Transfer characteristics         : BT.470-6 System B, BT.470-6 System G
Matrix coefficients              : BT.470-6 System B, BT.470-6 System G, BT.601-6 625, BT.1358 625, BT.1700 625 PAL, BT.1700 625 SECAM, IEC 61966-2-4 601
(4 stereo audio tracks as the one below)
Audio #1
ID                               : 2
Format                           : AAC
Format/Info                      : Advanced Audio Codec
Format profile                   : LC
Codec ID                         : 40
Duration                         : 30s 37ms
Bit rate mode                    : Variable
Bit rate                         : 125 Kbps
Maximum bit rate                 : 146 Kbps
Channel(s)                       : 2 channels
Channel positions                : Front: L R
Sampling rate                    : 48.0 KHz
Compression mode                 : Lossy
Stream size                      : 460 KiB (6%)
Do You have any ideas?
Thank you!
Best regards,
Camillo

Hi!
I tried using the "Strobe Media Playback"
http://help.adobe.com/en_US/FMPSMP/Dev/index.html
but with same result.
it seems we have an horizontal double edge on edges.
Camillo

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