Intel core 2 duo processors do represent the best bang per buck at the moment, but as you imply, that would involve replacing both cpu and mobo so in round figures you're talking about £200 and up. You're already using dual core, so the benefit could be marginal.
Before you take that precipitous leap, have a look at the cpu charts on Tom's Hardware. Compare your current cpu with say a Core 2 DuoE6400 or E6600 in an appropriate benchmark (you mention video encoding)
You'll get an idea how much quicker it could be doing the kind of thing you actually do. back with a link in the next post.
I notice you have 2 identical HDD's; if they are currently configured as simple master / slave, you could consider setting them up as a striped raid array for the speed boost favoured by die-hard gamers, but then again if one drive fails, you've lost all your data!
Another, more straightforward, alternative to using RAID (which is dependent upon whether your Disk Controller supports it, although many do these days), would be to move the page file to the 2nd HDD. This may help share the load more evenly.