Robert Cringely from PBS has built a video server in his minivan to have his kids stop bothering him. For only $190, he built a custom computer that would encode video in H.264 (AVC) codec and stream it to a PSP he had installed in the back of the vehicle. Why the PSP? Because it "plays movies beautifully."
While Bob doesn't go into details on how one would be able to fashion a video server for themselves, he does give a very interesting tidbit: "Though not advertised as such, the PSP is EXTREMELY water-resistant."
Of course, I haven't verified that claim. Nor will I try to.