Someone answered me on the video lan forums, check it out.
My relevant code is below, where the most important part is the additional option for the vlc media player ":file{dst=C:/Users/the man/yahoo.mp4}"
.
mFactory = new MediaPlayerFactory();
mPlayer = mFactory.newHeadlessMediaPlayer();
String mrl = "rtsp://@" + addressStr + ":" + mPhoneRTSPPort;
String options = ":sout=#transcode{vcodec=h264,venc=x264{cfr=16},scale=1,acodec=mp4a,ab=160,channels=2,samplerate=44100}"
+ ":file{dst=C:/Users/the man/yahoo.mp4}";
mPlayer.playMedia(mrl, options);