Video-on-demand systems will be the video rental shops of the future. One of the great challenges in the VoD domain is optimizing the cost/performance ratio of the designed system. We present a clustered, high performance, high availability and low cost VoD system, which is based on a network of personal computers. We experimented with state-of-the-art video compression algorithms like MPEG-4, although our system is video format independent. We succeeded in serving 90 near DVD quality streams per node, with great potential for expansion. We show that the key factor of this success is the migration of performance demanding procedures to clients of the system, which possess the appropriate processing power to support them. Furthermore, we present the results of our experiments with systems of 2 and 3 server nodes that prove the linearity between the number of server nodes and the number of served streams.