You can read the tom's system builder marathons for the past few years- they have used c2duo's, c2quads, and i7's. Depending on the specific benchmark, the dual or the quad might win. It is hard to clearly define where the quad has an advantage, except for some of the video encoding apps. Likely the quad will have a greater advantage in the future. So how long do you intend to keep your cpu? If the answer is 4-5 years then you might go one way, 2-3 years you might go the other way.
Also, what do you do besides the video encoding (or whatever) app? Do you intend to burn DVD's while you do something else? Run virus scans? The way I see it is that if you are running apps that don't benefit that much from more than one core, then you can have one core run your main app, and the other core can deal with the other things the OS has going on. Two cores might be plenty. but OTOH if you want to keep one or two things going, and you want to do a virus scan, burn dvd's, etc. in the background, then you can have one core for your foreground process, another core or two to deal with the OS, and still another core for the hungry background task.
I run autocad at work, and it mostly uses only one core. We bought some c2quads recently, and I ordered a c2duo for myself. My c2duo will very clearly wipe the floor with the c2quads. Absolutely no comparison.
OTOH for my new computer at home I bought a Q9400 and overclocked it. I can run a virus scan, and other minor stuff, and not slow down the computer at all. It might do the same thing with a c2duo, or it might not, but I got the Q9400 for a good price at microcenter so I thought I would go for it. Since I tend to do things like run virus scans, download stuff, copy folders, and still want the computer to be responsive, I decided not to take the chance on the c2duo.