299.99$ x 1
http://www.newegg.com/Product/Produc...82E16813151085
199.99$ x 4
http://www.newegg.com/Product/Produc...82E16819105235
29.99$ x 4
http://www.newegg.com/Product/Produc...82E16835114078
109.99$ x 8
http://www.newegg.com/Product/Produc...82E16820134936
279.99$ x 1
http://www.newegg.com/Product/Produc...82E16811165196
154.99$ x 1
http://www.newegg.com/Product/Produc...82E16817815003
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2535 $ for 4 x Quad Core 2.1 Ghz, 16 GB of memory. Add hard drives.
So you have 16 cores that can probably do 3-4 simultaneous 640x480 SD encodings per core for a total of about 40 and the motherboard gives you 3 gigabit network cards so you could stream uncompressed videos directly.
Will probably beat any hardware solution and dedicated hardware equipment.
ps. this particular model of motherboard has an extension module that you can use to add 4 additional processors for a total of 8, so you'd have 8 x quad core processors. you'll need 2 x 850w power supplies though, or at least one 1700w power supply according to the reviews on the product page.
ps/disclaimer. I did not check if the motherboard is compatible with the processors and the memory I selected. What I wrote is just a suggestion, it's your duty to check the motherboard manual and see what's supported or not.