Encoding seems to be a CPU intensive task, so will i benefit in getting a i5-750 over a 630 propus. I have been told that a higher end GPU like the 5770 ddoes not do any better than a 5450, so i could spend the money on a nicer CPU if it would help.
what you get depends a lot on how much you are spending
i would either consider the i5-750 with a discrete card (HD5670) or for the lower end AII X4 630 and either use the IGP or discrete (HD5670)
reason being is that the i5-661 is really a dual core with HT and the AII X4 630 would beat it , also the IGP on AMD boards (HD3200/3300/4200) is wuite a bit better than the IGP for intel's solution. Keep in mind price, the i5-661 is more expensive than the i5-750 let a lone the 630
They are pretty even in performance and I would give the i5 661 a slight edge. I do agree with the cost difference. The OP's best cost option is to get the X4 630 and use IGP over a dedicated GPU. If the OP wants a dedicated GPU, the i5 750 is the best bet since it is the overall better CPU.
The i5-750 is very tempting, but for twice the price you don't get twice the performance, especially in areas of encoding/decoding. I have tried to justify getting it since it would only be about 100-150$ more for the total build, but that much money goes along way these days.
My possible build as of right now:
Asus MA 770TD w/630 propus
520w Antec Neo Eco PSU
Seagate 500 gB
Mushkin 4 gB ddr3 1333 cas 8