The dual-PIII setup would very nice indeed, but we are talking about a 1.2GHz Tbird here. Can you say zzzzooooom!? One other thing to consider would be the maximum memory capacity of the motherboard(s) in question. Typically, most KT133 boards will support at least a gig of memory which is quite a bit. On the other hand, I've seen some dual-processor boards that'll only do 512megs. I guess it depends on what you wanna do. Also there's the price consideration as well. I know that Intel has dropped prices to compete w/AMD. I also know that the 1.2 TBirds aren't as inexpensive as say, the 1gig birds.
You also need a dual-processor compatible OS (WinNT/2K). You're probably already running it though. Being that you're looking at the 1.2 TBird, I'd say go with that. Excellent performance and you'd save a little money. Just put a big HSF on it as they run hot.