@DavidA @Oscar:
You can do this today, with very little code, but keep in mind that the application/x-mpegURL format isn’t supported outside of iOS/Safari & some Android devices.
Here’s a demo, which pulls this testing stream: http://devimages.apple.com/iphone/samples/bipbop/gear1/prog_index.m3u8
video hls demo.zip (65.8 KB)
It uses the Video.js player, but you could do this with the normal video element by using this code:
<video controls preload="auto" width="640" height="264" >
<source src="http://devimages.apple.com/iphone/samples/bipbop/gear1/prog_index.m3u8" type='application/x-mpegURL' />
<!-- Use some fallback for other browsers -->
</video>