I would actually suggest the i3. Save your money and grab 16GB of ram from a 3rd party. You wont notice a diff from the i3->i7 with one exception, video editing. If you use any type of vid editing software more than twice a month, then it may be worth it to get the proc upgrade. But i would say 97% of pp dont.
What type of encoding are we talking here? is it something you run then go to bed, or you need that performance in real time (such as editing).
i think Top and MP have it right, if you're not editing HD stuff, it aint worth it. I've made a couple HD home movies for fun on the i5 with ease.
Note: Do you know anyone who's still in university? The savings you get through them are quite good.
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