While I was developing a DVR for a specific purpose I did many h264 streaming tests mainly using ffmpeg as the server and VLC as a player. The goal was a bit different, as I just needed a way to preview four cameras (v4l2 devices) in realtime, so I ended up streaming h264 video directly over UDP, but in the research process I also used VLC as the server, so maybe it can serve as a starting point for your testbench.
Assuming you are using Linux as your server platform, the command line below uses VLC command line client (cvlc) to get raw video from a v4l2 device (a webcam or a video card input), encoding it in h264 and then advertise the stream for a RTSP client to get:
cvlc v4l2:///dev/video0 --sout '#transcode{vcodec=mp4v,vb=2048}:rtp{sdp=rtsp://@:8554/video.sdp}'
If you also use VLC as the client, you can view the stream with this (server would be the server name or IP address):
vlc rtsp://server:8554/video.sdp
Since you need to stream the video to many clients, it would be better to use multicast, so your server doesn't have to send out a new stream for each connected client. Supposing your multicast address is 239.255.1.1, you just need to specify it on the RTP section:
cvlc v4l2:///dev/video0 --sout '#transcode{vcodec=mp4v,vb=2048}:rtp{sdp=rtsp://@:8554/video.sdp, dst=239.255.1.1}'
Since the video.sdp file is generated by VLC itself, you just connect the same way as before, but your client will get the stream from the multicast address instead:
vlc rtsp://server:8554/video.sdp