I play video although the mp4(h264/avc) & aac format but my server 100% under load and all resources using "plex new transcoder" (nas4free @ dual core 3 ghz & 2 gb ram). As a result, buffering writes about every 10 seconds on the screen.
Sounds like you're transcoding. The container and video/audio codecs are super important for direct playback but so are the bitrate and MP4 level.
You can increase the Local/Remote Quality in the Settings menu to try and play higher bitrate media. If the average bitrate of your media is below the Local/Remote quality then we'll attempt to Direct Play or Direct Stream the video.
You can also check the AVC level. The app will only direct play <= Level 4.0. The 4.1 peak bitrates are are 2x higher.