iHomeServer will attempt to stream your media in its original media format to devices when using either iHomeServer Web Access or when using the DLNA streaming features built into iHomeServer.
However, in either case, your device or browser may not support the native media format and therefore not play your track correctly (or at all).  Alternatively, and specifically in the case of iHomeServer Web Access, you may choose to decrease the bandwidth requirement of your streaming media because you are running over a lower bandwidth network such as 3G.
In these cases, transcoding can be used to automatically convert the music or video file into either a format that your device understands or a lower-bandwidth format on-the-fly.
This topic describes the transcoding features within iHomeServer and how they are configured for iHomeServer Web Access clients and DLNA clients.

Transcoding Rules vs Transcoding Profiles

There are two transcoding concepts in iHomeServer - 'Transcoding Rule'  and 'Transcoding Profiles'.  Transcoding Profiles define the actual transcoding that is applied to a particular file format (eg 'Profile A = "transcode all *.M4A files to WAV").  The Transcoding Rules define which devices use which transcoding profiles (eg "Apply Profile A to Device B").  These are described in further details in the following sections.

Transcoding for iHomeServer Web Access

Transcoding options are available when playing video via iHomeServer Web Access.  When a streaming request comes in to iHomeServer via the web client, iHomeServer will review the transcoding rules that have been configured and provide a choice of transcoding profiles back to the web client.  You can then choose which profile gets applied when you are playing your video.  As you can see, it is perfectly valid for a transcoding profile to contain multiple transcoding options - eg a 1Mbs bandwidth option, a 512kbps option, etc.  All the valid options get returned to the web client so you can choose the best one for your circumstance.

Transcoding for iHomeServer DLNA Server

Transcoding options are also available when playing music or video via the built-in iHomeServer DLNA server.  When a DLNA request comes into the server, iHomeServer will compare the request details against the transcoding rules that have been configured and choose the best (highest priority) transcoding profile when forming the response back to the DLNA client.  Unlike iHomeServer Web Access transcoding, only the transcoding option with the highest priority is used with DLNA transcoding.
Please see this the topic on Transcoding for DLNA Devices for further information on when transcoding may be required.  Please see the subsequent topics on Transcoding Rules and Transcoding Profiles for information on how to modify these configurations.