Alex,
Axis IP cameras that support h.264 do not require transcoding. You can setup stream profiles using the camera’s admin interface to produce lower bitrate streams, and Wowza StreamManager to start them up, and the streams can be played in IPhone, Silverlight, rtsp devices and Flash.
Getting multi bit rate functionality with Axis IP camera source is going to be a challenge… possibly if you setup multiple profiles in the camera and start them up in StreamManager, and reference them in server-side SMIL for live HTTP Streaming, and client-side SMIL or playlist… it might work.
See this post to start:
http://community.wowza.com/t/-/53
And this for multi-bitrate with server-side smil (mult-bitrate section):
https://www.wowza.com/docs/how-to-set-up-live-streaming-using-an-rtmp-based-encoder
And this is JW Player tutorial for Flash player based dynamic switching:
http://www.longtailvideo.com/support/jw-player/jw-flv-player-v4/27/bitrate-switching
Richard