EDIT: OK, so, somehow I got this working somewhat properly.
OK, I don't get what could possibly be holding me back from having VLC stream my MP3s to my Droid. All I get on VLC S&C is Cannot play: too many errors. I can't figure out the exact error or issue. I can still control the player remotely, but I get no audio streaming to the phone. It doesn't even work when connected to it through the local network, so it's not a latency issue as far as I can tell.
I just can't even figure out where to possibly track down the problem. If anybody here can help me out, it would be greatly appreciated.
EDIT: I used the debug mode in VLC S&C and this is the error code it gave me ERROR -2147483638. I dunno if that helps but it's the best I could do.