Wrong, this doesn't do transcoding on device at all. The device just tells the Chromecast where to get the media, and then chromecast does everything from there on. The device stops being important from then on - it doesn't even have to stay on the wifi network.
Hmm, so then can it even play High Profile H.264 or DTS? Will it even be powerful enough to decode HD when we move to HEVC soon?