Windows Phone and IIS smooth streaming

I'm presently working with a Windows Phone video application that streams video content over a 3G connection from a IIS 7.5 web server. On the drawing board, this seems to be an easy task: simply use the Silverlight Smooth Streaming client for Windows Phone, encode your video with Expression Encoder, upload the video to your server, and give the URL to your phone application.

However, in practice, things turned out not to be as simple. Currently, the biggest issue is that the video contains encoding erros (pixelation, jamming, etc.) when viewed through the phone. This seems to be a phone/codec problem, because the sometimes (two times out of ten), the video indeed works when streamed.

Currently, my solution is to download the videos locally to the phone; hopefully I have a tip to share later on how to solve the issue of corrupted video frames.