Android 3.0 preview devices support H.264 playback (i.e., decoding). They simply do not support H.264 encoding. (See documentation.) See also this Q & A.
I don't know how to convert a live stream to H.263, as the OP requested, but for those who can do the conversion first, FFmpeg is a possible solution.
ffmpeg -i /path/to/your/file.h264 -vcodec copy -acodec copy /path/to/your/newfile.h263
(a source)
But see this answer for more specific ffmpeg options designed to work on Android.
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