Playing network streams is very different from playing local files. Please follow these exact steps to reproduce:
1. Install VideoLan (sometimes named VLC) ver 2.0.7 on Windows or Linux (I used Windows 7 64bit). You can download it from http://www.videolan.org
2. copy sample.mp4 to installation directory of VLC
3. Start command line window and go to installation directory of VLC
4. Use this guide for reference: http://www.videolan.org/doc/streaming-howto/en/ch05.html specifically this section: Video On Demand
I used this command vlc --ttl 12 -vvv --color -I telnet --rtsp-host IP_ADDRESS:554
Where instead of IP_ADDRESS you use actual (not loopback) IP address of the desktop. (you can find it in the output of ipconfig)
5. Use telnet to connect to vlc (it uses port 4212). Don't worry that what you type is not displayed - it is expected. If you don't have telnet on Windows box, you may have to install it using Server Manager or Programs and Features. Or just use PuTTy:
PuTTY Download Page
telnet localhost 4212
6. Issue these commands in telnet which will setup vlc to stream sample.mp4 in VOD mode:
new Test vod enabled
setup Test input sample.mp4
7. Test that vlc running in streaming mode is working by running second instance of vlc with these arguments (replace IP_ADDRESS):
vlc rtsp://IP_ADDRESS:554/Test
8. Install MX player on Freescale board: https://sites.google.com/site/mxvpen/
or
MX Player - Android Apps on Google Play
9. In MX Player select context menu and choose 'Network Stream'
10. Enter rtsp://IP_ADDRESS:554/Test and start timer when video starts showing. Observe delays at 0:30 and 0:40 and stream stopping playing around 55/60 seconds. (entire stream is 1:31)