There has been someone who had created a modified verison of the TV engine that transcoded the stream using VLC, so MP was able to play it. Haven't heard from that anymore though. Maybe it is indeed possible to use the VideoLAN plugin to transcode the stream on the fly and then sending the resulting stream directly the the internal player. I'll try this when I have the time.
Would be great! Would be a huge step in getting IPTV to "replace" normal TV.