Howdy partners

,
I've been watching Starcraft 2 streams quite a lot lately and had the idea to stream myself playing some Worms via
justin.tv..
In theory it's quite easy. Download Adobe Flash Media Live Encoder, get a plugin, run your game in windowed mode and you're good to go... Yeah that's right, you can only stream games in windowed mode.

But smart as I am, I got around that issue by using VMware and install Windows XP on a virtual machine. So I got my WA in a nice little window and set up the streaming software.
Then I hosted a game with my desktop PC, joined with my laptop where the streaming software is and started streaming... Generally you could say it worked, but I got a major problem... See for yourself, the
stream is lagging - you can still see some recent broadcasts there, I was just playing around.
Notice that the stream runs at around 15 fps at some parts, and at around 2 fps on other parts. I can't figure out what the problem is, I was literally doing nothing with my laptop while broadcasting, I closed everything except the virtual machine and the streaming software, yet it still drops frames and is generally just slow.
So my questions are, does anyone know what the problem could be? I think it could be either my processor (Mobile Core 2 Duo, 2x 2.13GHz) or my internet connection (1 Mbit upstream) but the latter one is rather unlikely. Does anyone wanna try this for himself? I can give advice if needed. And finally, can anyone think of a different way to run WA in windowed mode than running a virtual machine?
Any help is appreciated, I'd really like to do this because I'm curious about the viewers' reaction. It might even boost the WA player count by a bit if it's successful.
Cheers.