JPEG to MPEG with Managed Code

I've seen similar questions on forums so forgive me for asking here, but I've yet to see a definitive answer.

I have a 'chat' client/server application which currently takes still images from a source and distributes them for display on multiple clients (emulating a video stream). I have full control over the server (.NET service, currently .NET 2.0 but can be changed) and client (WPF full application using .NET 4) code, and currently use no third party tools other than some WPF controls.

Bandwidth will soon become an issue and I need to start using compression on the images, so have been looking for some time for a tool / library that will programmatically take in images and output something else. Ideally I would like this 'something else' to be mpeg4 based, but it doesn't have to be.

To be clear, the 'video' still needs to be transmitted frame by frame, but the bandwidth used needs to be dramatically reduced compared with my current methods. The source of the stream will always be a still image, and the resultant object on the client will also be a still image, I just need the transmitted data to be reduced.

I would be happy to look at the likes of FFMPEG or VideoLan, as long as this does not result in the need to publish my own code. I would also be happy to have to pay a 'license fee' of up to a few 100$ if I can find the right tool, although I'd prefer to author my own solution. I've also looked (and am already using) the .NET wrapped DirectShow libraries, but these would appear not to contain the tools I need.

I'm struggling to find a solution.

Many thanks for reading.