New System Upgrade Help

I am looking to do an upgrade on my system, but I am not sure which the best path to take is. As always I can throw a ton of money at this and get the best-of-the-best parts, But that is not what I am want to do here. I use to game allot, but lately I have been converting my DVD collection to stream on my home network. So that takes up most of my time and I now game on my Xbox 360. So with that said, I am looking to get more out of my computer for video conversion and maybe some more gaming later. I do not want to break the bank and doesn't have to be a long term upgrade. I can always replace MB/CPU later when the prices fall some more. I would like the option to overclock if I want to, but it's not a deal breaker for me. So any help or input here would be greatly appreciated...

Common parts that will be used in all systems:
(2) PNY 9800 GT EE 1gb (SLI)
(2) Seagate 160gb 7200rpm SATA
WD Green 1tb 7200rpm SATA
Hitachi 640gb 7200rpm SATA
Samsung 18x CD/DVD-RW
IO Gear PCIe 2-Port eSATA Raid Card
Hauppauge HVR-1250 PCIe TV Tuner Card
Sound Blaster Audigy 2 ZS Platinum
BFG EX-1000 1000 watt PS
Cooler Master Sniper Scout Case

Current parts to be upgraded:
EVGA 680i 122-CK-NF68-AR
Intel Core 2 Duo E6600 LGA 775 2.4Ghz
Zalman CNPS-9500 Cooler
OCZ Platinum XTC PC6400 DDR2 (2x1gb)

How will these options compare to my current setup and which would be my best upgrade path. I do need help making a choice with the memory (make & speed) and cooler for all options.

Option 1: The one I am currently leaning towards.
AMD Phenom II x4 925 2.8Ghz
Corsair DDR3 1600MHz (2x2gb)
AM3 Cooler?
$250.00 without the cooler

Option 2:
Intel i5-750 2.66Ghz
MSI P55-GD65 LGA 1156 SLI
Corsair DDR3 1600MHz (2x2gb)
LGA 1156 Cooler?
$440.00 without the cooler

Option 3:
Intel i7-860 2.8Ghz
MSI P55-GD65 LGA 1156 SLI
Corsair DDR3 1600MHz (2x2gb)
LGA 1156 Cooler?
$480.00 without the cooler

Is there $190 worth of performance between the 925 and i5? The i7 is at the top of my budget with the CPU Cooler. I like the 925/AM3 since I can pull the 925 and just drop in a faster AM3 CPU later and not be out a ton of cash. The ram is just what's on sale at Frys now, not sure if it will work or not so let me know if there is something better to use. Thanks again for your input...
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More about system upgrade help
  1. One Cooler to fit them all: Coolermaster Hyper 212 plus ($30). Good performance, reasonably quiet, and fits every socket (AM2/2+/3,775/1156/1366) and inexpensive.

    To save more money, rather than a Phenom II x4 925 you might look at getting an athlon II x4 630. The nice thing about AM3 is you should be able to upgrade to the new 6core CPUs coming out (if your motherboard gets a bios update for them).

    I believe video conversion uses alot of RAM and threads so the i7 860 would be the fastest, you might want to look at the articles on CPUs and see the benchmarks to determine if it might be worth it to you.
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