I writing this on the premise of using a X2 CPU to run two "virtual" computers so to speak. Meaning running two instances on a program at over 50% of the performance if only once instance of the program was running i.e. if it takes 2 hours to encode one job when running one instance, I would like to run the program twice simutaneously to finish two jobs at the same time and finish in 3 hours and 30 minutes instead of 4 hours...
I would recommend 2GB of RAM. I have only seen one benchmark comparing CAS latencies when if comes to encoding jobs. I felt the difference between 2,2.5, and 3 to be small on this particualr discipline. 2GB of DDR500 RAM with a CAS of 3 can be had for $200. I see no problem running the RAM at DDR 230-240 with tighter timings as well.
I dont know if a RAID 5 setup would deliver the performance needed to justify the costs invovlved. Hardware assisted RAID5 cards are relatively expensive not to mention the cost of the redundant drive. I think a RAID 0 array is risky when it comes to video projects. I wouldnt trust large projects on a RAID 0 array, but I imagine some would. CPU assisted RAID 5 cards are cheaper but use clock cycles to get the job done. of course an X2 would perform admirably in this instance but who wants to devote valuable clock cycles to the HDD array? Maybe some would consider it a worthwhile endeavor. I am going to play arround with having the source file on one drive and the finished project on another to see if there is a noticeable increase in performance. if there is, I would say you would break even with a RAID array since it will be reading and writing from/to the same drives. But that is not a scientific analysis, its just a theory even if using two separate drive did indeed improve performance. I would suggest the western digital "RE" series. They are rated for 24/7 usage and seem to be quite reliable and cool. They can be had for $105 for a 250GB HDD.
I have always liked the ATI AIW cards, but I think it depends more on what video source you use predominately. If you have a Camcorder or such, any firewire card will do better since it is all digital. If you are getting your material from a cable box, VCR, yadayada, an AIW would be good. but I think one of those theater wonder Pro cards or whatever may be more in line with what you would want especially if you want to capture in HD mode. I think capturing via analog transfer is a waste. In any event, the AIW is a good card (if a little expensive). This also takes us to AVIVO by ATI. the X100 series is claimed to support GPU assisted encoding but there is no software out here yet to use it. ATI promised us this, but instead delivered a proprietary program that simply worked faster than any other (with no mention of quality I might add) In any event, there is not much to say about AVIVO from anywhere so I think it would be best to hold off on a new GPU until we can see if AVIVO is the real deal and/or to see what Nvidia has in store. At this point, AVIVO looks to be an ATI only thing, so unless you use the ATI program and/or its nero derivative, you wont get any benefits of using a X1000 series card.
When it comes to a good case, ASYS makes a good hybrid ATX/BTX case that is essentially "mesh" so it breathes well. A 120mm fan breathes directly on your HDDs and there is room for 2 other 120mm fans. Its big, expandable and geared for the future. It can be had for $135 from newegg. Besides the CPU, I think this is the most important item you can buy for encoding.
Since encoding jobs take so long to complete, I think system stability and low heat are paramount. This will reduce errors and make your system last longer. Hot running high performance RAM and hot high performance HDDs are against what I beleive it when it comes to video editing. I would suggest cool running parts that are cost effective if even a tad bit slower. I cannot stress enough getting a GOOD case. I have bought so many mobos and HDDs since I have been doing the Divx thing due to heat breaking stuff down. but I guess it has paid off. I have more material than anybody I know, but it has come at a price.