Thanks Captain. I will try to post upload my next video in 1080P and less compression as you say and wait for Vimeo to compress it themselves...
I'm not sure if you can stream 1080 if you are not a Plus user. You'll have to check that.
My suggestion is to upload at 720P (if that is the highest they'll host in the free account) BUT compress it a lot less. The file should look good on your computer, in 720, before you upload it. I was finding that the problem was more my file then it was Vimeo.
I do the same thing, but with 1080P since I pay for the plus account.