I've been looking at upgrading my video editing rig recently and have quickly realised things have come a long way since I built my system just about a year ago.
Anyways, current benchmarks aimed at video editing/encoding point towards the high end P4s as the way to go. (The new Athlon 64s seem to have the edge in terms of games). So if you're building a system now, build one around a Pentium 4
http://www.intel.com/products/deskto...w_prod_031103&
Don't believe me? Check out the benchmarks:
http://www.tomshardware.com/cpu/2004...escott-14.html
I couldn't find a 3.4 EE, So it seems the P4 3.4GHZ is the CPU you want at around £300 (I don't think the extra £300 for a few seconds is really worth it).
For the motheboard, I'd go for an ASUS P4C800-E DELUXE (at around £130) combined with 2x512MB 184Pin DIMM PC3200 DDR RAM Non-Parity CL2 Corsair RAM at around £200). You've only spent £630 and you've got a pretty hot base for a PC.
Next you hard drives. I'd go for a Western Digital Raptor 10000RPM 36.7GB as a boot drive and combine this with a large Hitachi DeskStar 7K250. These should set you back around £280 and give you around 1GB per pound

.
Now we need optical drives. I'd go for a DVD/CDRW drive and a Multi-format DVD writer. The DVD/CD combo should give better CD writing speed for VCDs/Xvid discs, but also the option of copying Master DVDs on the fly. Haven't really looked into this much recently to be honest.
And then the rest is just filler - cooling, case, PSU etc. I'm sure there's people better equiped to give you some advice