Streaming video reduces my speed. Help

Hi Everyone,

I have an Ustreamtv.com account where I stream a camera during the day.
I use Adobe Flash Media Encoder to improve the image of my stream.
It says:total bandwidth required to stream 430 kpbs and it's in the VP6 mode.

My ISP timewarner cable allows me to upload 512 kbps max.

When I am not using the encoder my connection is fast as hell,sometimes 24 mb/s and 0.49 upload on the speedtest.net meter.

But when I'm streaming the upload speed goes up and down wildly and the picture on my stream looks like crap sometimes and i have it set to automatically drop frames.

I just ran a speedtest and it said it was uploading at .11 which is a quarter of what I should be getting.
Am I doing something wrong?

Is it normal that using an encoder is going to slow your connection down drastically?


Thanks