How to stream audio from VLC through AirPlay

I have a setup where my stereo speakers are connected to an Airport Express. This way I can listen to music from my iPhone and my Mac without switching cables. Problem is, however - the airPlay service only works easily with apple-made software so far, but making it work for VLC is actually very simple.

Update your VLC version
I tried this using vlc 1.0.2 and the codec we need to use to stream the audio wasn't recognised by vlc, so I upgraded to 1.1.12.

Edit VLC settings

Go into Preferences, select "all" to view all the avaliable controls and navigate to Stream output and edit the Default stream output chain to contain something like this: #duplicate{dst="transcode{acodec=alac,channels=2,samplerate=44100}:raop{host=10.0.1.1,volume=175}",dst=display{no-audio,delay=3500}}

this will display a movie on the computer screen while sending audio through airPlay.
Edit the IP-adress after "host=" to match the IP of your airplay-device, and edit the delay so that the video matches the audio. For my setup, 3500 is perfect, but it might not be enough or be too much for your network. tweak it until perfection :)