How much power does a Raspberry PI consume when doing a simultaneous 1080p encode and decode? I’m assuming that is close to worse case. You stated that the B version will require 700mA capable phone charger. According to Wikipedia, a USB 2.0 device may draw 500mA of current . If someone plugs in just one USB 2.0 device into their Raspberry PI, that could leave only 200mA left for the Raspberry PI and whatever it is doing. That would be only 1watt of power (200mA * 5v) left.
As a workaround, anyone with a relatively power hungry USB device could use a powered hub, but that would be messy.