I did something similar; it's mainly for development.
I used GNU/Debian Lenny on UBIFS and installed GStreamer (I used my base from KNX/EIB
http://chiana.homelinux.org/~marc/eib_sheeva.html)
$ apt-get install gstreamer0.10-ffmpeg gstreamer0.10-plugins-base gstreamer0.10-plugins-good gstreamer0.10-tools
Send with
$ gst-launch v4l2src ! video/x-raw-yuv,format=(fourcc)YUY2,width=(int)640,height=(int)480 ! ffmpegcolorspace ! videoflip method=3 ! jpegenc ! udpsink host=226.226.226.123 port=1234
Receive with
$ gst-launch udpsrc uri=udp://226.226.226.123:1234 ! queue2 ! decodebin ! autovideosink
Note that you can optimise a lot by tweaking the parameters and replacing the encoder with something else.