I used to recommend iMediaShare back in the day, but I found as they added features, it seemed to do less. Not sure, but when I looked at my HTC last year, it looked to me like they were using an oem version of that. You might give that app a try.
I searched for other DLNA servers and this looked interesting, I haven't tried it yet.
I'm wondering if the built in apps aren't trying to transcode on the fly and that's what's hitting you.
Check out the lame man page, here -
My gut says that abr may be safest.