How to convert .h264 videos to .vlc format.
Converting H.264 Encoded Videos directly to a VLC Playlist (.h264 to .vlc conversion) is, per se, not possible. But you can certainly add an H.264 Video to a VLC playlist, thus generating a .vlc file.
There is really no need for a conversion, since the VLC Media Player supports a large amount of media formats, including .h264 files, and also comes with its own conversion utility accessible through the 'Media -> Convert/Save as' function.