This is a fascinating method to accomplish the task! The method I was familiar with in that time period (late 2003 or so) was, well, much cheaper to set up.
There was an internet acquaintance I had at the time who had some manner of access to a nice symmetrical 100/100 mbps internet access line either at the university he worked for/went to, or possibly just in the outlying student apartments - a real location matters sort of situation. His setup was a fairly recent at the time Pentium 4 desktop, and one of the cheap video-capture/tv tuner cards for it that had been around for a number of years at that point (at any rate much cheaper than a whole camcorder that supported video input and digital output).
His setup used Nullsoft's NSVtools for capturing and live encoding straight from the composite or coaxial inputs, and of course the NSV format for the actual stream, which at that time was using MP3 for the audio and VP3 for video (later, newer codecs were supported as time went on of course). On the client side of things, the main intended target was Winamp 2.9 or newer, and VLC and a few other players picked up support eventually.
With a ~512 kilobit per second stream, you could usually pull off 352x240 or 320x240 at 29.97 fps for straight up quarter-NTSC video transport, or 30 fps for content that wasn't coming from an analog source. Some live action content looked fine down at 256 kilobits a second or less! If you wanted to try to pull off dial-up availability it was capable of going down to about ~40-50 kbps output by quartering the overall resolution again and kicking it down to 15 fps, but honestly I don't think that'd stay stable. Might have been fine for an ISDN line or something!
I had a 8/2 megabit cable line at the time so the bandwidth wasn't a big issue for watching, but I never tried streaming myself. On his end, he'd tried to do some streaming of games he was playing on the same computer used for the streaming software, but that never worked out due to the processing needs of the encoder. So the content was mostly him playing games off his consoles or sometimes off of DVDs and VHS tapes he'd found, or sometimes just streaming off his cable box to watch a movie or sports. Live action video you could usually stand to see full screen on your monitor, animated or video game content you'd usually leave in a window cuz the artifacting could get quite a bit more noticeable. Watched Silent Hill 3 for the first time that way.
The most people online this guy's setup ever seemed to have was around like 80 people, if too many people past that joined the stream would get shaky for everyone. Not sure what the limiting factor really was there. We of course used IRC for chatting about what we're watching and making requests, all that stuff.
The NSVtools (windows only) from the time period are still accessible via web.archive.org on nullsoft's website, as well as some of the NSV sample video files used to demonstrate. Current and vintage versions of Winamp can still work with the files and the streams, and VLC is mostly still able to handle the files and streams.