I have had the same issue and have been advised by TelstraClear that it will be fixed in their next software update - whenever that might occur.
After being frustrated for the last month or so when wanting to watch isky live, I have researched the issue and found the following:
When using isky live with the TelstraClear DNS servers, isky live connects to IPs 22.214.171.124 or 126.96.36.199. Ping times for these IP addresses are around 170 -190ms, and isky live will continually rebuffer. When using isky live with Telecom DNS servers (or other NZ open DNS servers), isky connects to IPs 188.8.131.52 or 184.108.40.206. Ping times for these IP addresses are around 23 -26ms and isky live works perfectly.
So there are 2 possible solutions I have come up with. Either should work.
1. Change the DNS servers in your router from the TelstraClear DNS servers to other NZ open DNS servers.
http://www.geekzone.co.nz/forums.asp?forumid=49&topicid=95560 Choose ones that do not block external connections. Telecom DNS servers 220.127.116.11 and 18.104.22.168 work.
or 2. Amend the hosts file on your PC so that one of the good IPs (22.214.171.124 or 126.96.36.199) is used by isky. Copy and paste the block below into the hosts file (I have used 188.8.131.52, you could choose either of the IPs)
184.108.40.206 fs-574f500000000000.id.velocix.com #skysport 1
220.127.116.11 fs-3b4f500000000000.id.velocix.com #skysport 2
18.104.22.168 fs-2a4f500000000000.id.velocix.com #skysport 3
22.214.171.124 fs-f74e500000000000.id.velocix.com #sky News
126.96.36.199 fs-184f500000000000.id.velocix.com #CNN
Happy iSky viewing!