are there any recommendations for encoding an HLS stream to achieve playback/decoding with the least CPU usage / smoothest playback? I am using an HTML5/Flash player but the Flash player stutters with HLS around 720p, video bitrate 2-3k.
This is more likely a function of the software renderer in flash rather than anything to do with HLS. Make sure Hardware acceleration is enable in the flash player, and make sure you are using stage video for rendering in your player.