OK, a dual 2.0 will benefit IF your NLE supports it. Pick the editor first, then the hardware. Older Vegas and Premiere would not benefit from a dual Xeon, HT or not. A 2.0 Xeon on Pinnacle Liquid would perform about as well as a 2.6 P4 with HT (pulling numbers out of my butt, but I have been using Liquid for about 4 years now.)
Duvie (and I know you know this), HT on, a Prescott should outperform a Northwood encoding to MPEG. All the rest of the tasks that involve editing, etc., the Northwood would be faster, clock for clock. If encoding is the ONLY bottle neck, get a Prescott IF you have to buy the same clock speeds.
Otherwise, the faster chip is the winner, not matter what the lineage. A same clock speed Northwood is faster than a Prescott. But a faster Prescott...
Fatty - DV Capture card? Do you edit? A DV capture card is called.... Firewire. OP did not say anything about AV->DV. I do DV (SD) -> MPEG for DVD, DV (SD) -> WMV for Web, and DV (HDV/SD) -> WMV-HD to figure out how to be ready for it. Since HDV is here, WMV-HD, H.264, and Long-GOP MPEG are very important. It is not all about old MPEG2 anymore. There are already WMV-HD titles available along with DIVX.
Again, all of this back and forth is totally pointless. Without knowing what NLE it is, any recommendation one what is fastest is usless.
So, thilan29, what editor?
If you say Pinnacle Studio, I would recommend the 2.4 P4 AND get something better than onboard Intel video.
BTW all (OT for thread, On T for editors), just bought an HP Pavillion 6005 with AMD A64 3200+, 512MB, ATI X200 with 128MB dedicated, 80GB, DVD-DL writer for $1200 at Fry's. I have only had the chance to run 1 (one) test with Liquid Edition 6.1 and VirtualDub (beta) on it to create a WMV of a MJPEG 320x240 still camera clip. Had to use VD to save back to AVI (LE does not support MJPEG in AVI wrapper) and deinterlace, convert from 15fps to 30fps. Used the GPU 2D effect to fix a camera rotate (subject was doing a hand-stand, and shooter turned camera to get in frame - sideways video). It was definitely faster than my 1.6A with AIW 7500. Of course it was not as fast as my 2x3.06 with 9600XT. But, very pleased with the results! Need to go get a 4pin-4pin firewire cable now...