I realize the file cannot be played unless some part of has been downloaded. I been searching a lot about this issue and specially happens with .mp4 files in general.
Some people suggest adding a MIME type to the server would fix the probblem -Done that and issue continue
backroom.bostonproductions.com/?p=393
Some other say "The problem is most of the H.264 files have the index at the end of the file which for progressive download means you have to download the whole file before you can start watching any of the video"
renaun.com/blog/2010/06/qtindexswapper-2/
I tried this tool but I believe the file still taking to long to load.
windows media services allow to do live stream but it uses windows format (.asf, .asx, )
it might be a matter of the way the server is set but im not sure.
by the way I also looked into
h264.code-shop.com/trac#H264StreamingModule but Im not sure if this only allows the file to start playing from any minute/second on the file or also affects the time the file starts playing..