Xsplit license problem

I'm considering starting up a stream for HotS and maybe for some minecraft as well.
The only thing is, I'm not sure if a personal license is enough to stream on Twitch. I'd rather not pay an extra $40 just because I felt like going for the safe option.
So does anyone here have a clue.

I wasn't completely sure which I should place this into since I'm doing this for gaming, but it's about purchasing software. Meh.

DO NOT USE XSPLIT

Coming from a semi-successful streamer, don't use xSplit.

Use a new software called OBS, Open Broadcast Software.

Completely free and great resolution. It just crashes like once in a while because it is in beta. Other than that, it is so much better than xsplit.

I've seen a few people using it but it seems to stop at about 480p streaming. Like the 720p+ and 720p seem to have the same resolution as the 480p version on streams.

I was considering getting that one but I couldn't remember it's name so I just went with the well known one =P

I'll give it a shot though.

I'm getting pretty severe latency issues when I play. I have a frame rate of 50 fps all the time, either with or without OBS on.
However, when I put on OBS, my commands are delayed on the game. Makes for pretty boring games to watch, and it makes it really hard for me to play.
I have a pretty high bitrate put on the stream, and I was just wondering if you had a sort of dummies guide to bitrates.

I only have a 1Mb upload which, I know, is pretty crap for streaming. I'd prefer a much higher upload but meh. My friend gets pretty decent streaming at the same level but he uses Xsplit instead and I can't really be bothered asking him what bitrate is a decent one.
I also tried lowering the frame rate being uploaded to about 25 but that made no difference.
If you have any idea what level of bitrate, or anything else I might need to lower for having only a 1Mb/s upload rate, I'd really appreciate the help.

The stream also ended up pretty laggy after a few minutes into each game. http://www.twitch.tv/hotskanwa/b/358621463

Ok... Just got told I need more ram...
I honestly thought that 4GB would be enough. Meh. I'll start streaming next month when I upgrade my RAM. I was going to anyway, but now I have a reason to as well. =P