If you implement the segmenter, then it'd be even better. There's BSD licensed (free for all, including commercial software)
C code from Apple that does this available.
There are two versions of the segmenter.
One is a Media Stream Segmenter, which takes H.264 compressed TS-wrapped input from STDIN and segments it and builds the M3U8 file for you as it goes (designed for live streaming, but this is also what AirVideo uses, and it just pumps FFMPEG directly into the segmenter).
The alternative approach requires a fully encoded file, and then segments it afterwards. This is the Media File Segmenter code, which does the same thing, but takes an on-disk H264 TS file as the source (rather than STDIN).
Like I said, both are available with nice licensing implemented in C, but to get the download, you have to be in the iOS Developer program (or find it elsewhere). I'm happy to send the current package privately if you just want to look at it (I am in the program).
The difference would be that with the non-segmented file, it wouldn't really be a "stream". Instead, the iOS device would need to download the entire file before it was able to play it, I believe. Apple's HTTP Segmented system allows you to "stream" video media to a player without having to either: (a) have a real streaming server that serves via RTMP or something similar, or (b) do "progressive-download" style pseudo-streaming.
I think you're doing pseudo streaming on WebGizmo now, and then just wrapping it in a flash player, ala YouTube. The iPhone doesn't even need the Flash player component, as AVFoundation will play the file by itself, it just needs to be served a M3U8 "playlist" and then it sends it to AVFoundation automatically, even via just Mobile Safari.
I should add, these HTTP-served M3U8-wrapped TS segmented "streams" work fine on Google Chrome on the desktop, so it is entirely plausible that they'd work fine on Android devices as well. I haven't tested this myself, but it should work in theory. Basically, Google implemented Apple's suggested HTTP streaming system in Chrome, though, so as long as Android has the same capabilities (I think so, but I don't know for sure).