No the extra L2 cache won't make that much difference, as much as 1GB of RAM
might.
I have the E6400 and E6600, and the E6600 kills in encoding/decoding video, but when gaming, my E6600 wins only because of the GPU in my system, compared to my E6400 (7600GT vs. X1300 Pro). If both had the same card, I can wager than gaming would be pretty damn close in terms of FPS and quality.
To the OP: The extra cache will help with encoding, as some have mentioned. I use Sony Vegas, Premire Pro, and some other video editing software, and my E6600 runs smooth with one or more of these apps running at the same time. Of course, if I start to encode with Vegas or Premire Pro at the same time, it will slow my system down a lot.