I've tried it with Slackware 12.2. It worked fine, even without X11, but I couldn't get the transcoder to work.
Compiled and installed mplayer, ffmpeg, x264 but to no avail. I can only stream PS3 compatible files under Slackware. With my Mac OS X Box the transcoder works great.
I haven't investigated this issue further, but it would be great to use my old Compaq 4x Xeon Server as media server and transcoder