There are two things causing the buffering: Closed Captions and Quality Conversion.
You need to disable the closed captions. Go to Settings->Languages->Subtitle mode->Manually selected.
To fix the quality conversion, on the server set both Internet and Home streaming quality to maximum and checked the ‘Play smaller videos at original quality’ checkbox.
You need to do the same thing for each client otherwise it might downscale which causes the buffering. To check that you are playing at original quality when watching TV go to settings (click on screen) and select HD and you can see the current quality.
Now the buffering should be gone. At least that worked for me.
Hopefully some Plex developer reads this so they can create a patch that fixes these issues, since these settings are not default.
