Oh good. I'm glad you went with the direct feed method.
In regards to the smoothness of transmission, I'm not really sure if it's based on what is processing the video, or if it's a limitation in bandwidth.
What kind of in-room mic did you use, a link possibly?
From what I can tell you, I have one of these http://www.bluemic.com/yeti/, if your mic has an omnidirectional option that's a good start for a room environment. If the gain is in automatic then turn it manual, so that way you can readjust the gain for a better listening experience.