In VLC, when streaming using an HTTP stream, the stream gets reset when the video loops. This causes applications like WiiMC to stop playing the stream altogether.
Is there a way to get the video to loop seamlessly without the stream itself being reset? If not, is there another lightweight application that can do this?
loopoption for the particular video file you're trying to loop? (Ref: VLC Documentation, Chapter 5. VLM - Multiple streaming and Video on demand).