The key here is Cisco is paying the patent royalties for anyone who uses their codec binaries - which will cost them $6.5m/year. They could do the same for x264, but it's probably legally safer to distribute an implementation they wrote themselves.
If the x264 people think they can give x264 to Cisco under a license that we can compile it and distribute the binaries with no changes to our MPEG LA licensing agreements, tell them to get talk of me (fluffy@cisco.com) if they want to do this. I came to the conclusion Cisco could not do this without x264 giving us an appropriate license.
