Streaming video with LMS?

For the last few months, I've been using LMS to stream to Raspberry Pi's and my Android phone, first using the Windows version and now the Linux version on a dedicated spare computer. It's worked great most of the time and does what I want it to do.

Now I'm interested in streaming video with LMS. I've been trying to read up on that, but I'm struggling a bit to understand how it works. I downloaded OSMC/Kodi last night and plan to install it on an RPi B+ in the near future for use as the front end device. (If I like it I'll probably get an RPi 2 to optimize performance, but I have a B+ on hand right now....) I'll install the Xsqueeze plug-in, which should let me continue to stream music.

There's a learning curve on the alphabet soup of video formats and so forth, but it seems that LMS is somewhat limited in the number of video formats it supports. My video files are in a variety of formats, and I'm thinking I may need to do some converting, or just not play certain stuff.

So I basically have a few general questions. Do you find LMS to work well for video streaming? Do you find the supported video formats limiting, and how do you work around that? Is it better to use something like Kodi (the new XBMC) or some of the other options (Plex?) for the backend server for video? If so, do those coexist well with LMS on the same computer?

Thanks,
Jim