Member uploaded video

What solutions for server-side encoding to FLV

[kapow]

For a website with member uploaded video (like YouTube), I think the situation is this (please correct me):

1.) Flash video is the most compatible (used by Google, YouTube, Microsoft...),
2.) Flash video ONLY support FLV format, but members will upload in .avi or other,
3.) So you need 'Server-side encoding' to convert the .avi to an flv.

Here's the question:
What solutions exist (free or paid) for server-side encoding?