The Phenom is an AMD processor, so I doubt you could upgrade it to an i7. I'd go for an over-clocked i5.

There is really no such thing as an 8-Core processor, they're all Quad-Cores (or 4 Cores) with a 'virtualization' of being 8-cores -- kind of like the old Hyper-Threading technology, and as a matter of fact it probably is. Also, graphics cards doesn't mean anything when it comes to video renderings, they are only good for enhancing output video reproductions such as games and movies.
If you want something fast for video-editing/renderings; a 2nd-Generation Intel Corei7 would be the ideal choice, and if you have the money to burn, the i7 'Extreme Edition' found mostly on hardcore gaming units would render your files like there is no tomorrow.

I am currently using a 2nd-Gen Corei7 and had recently rendered a 1hr25min (4.23GB DVD) file at VBR mode with 2-pass and the time was cut down to 3-hours compared to when it took me 11-HOURS from using a Core2 Duo processor! Of course my cpu is only a 2670QM @2.2ghz, but there are ones that are much faster, not including the Extreme Editions that I mentioned earlier. So yeah, a monster 2nd-Gen Intel Corei7 cpu will handle ANY Sony Vegas tasks.

+1 for an Intel i7 quad. I built my PC a little over a year ago now, but I think the most important parts are still available. While I built this PC for Pro Tools (I'm a pro audio guy), I've also had good success with VMS. Here's my build components:

http://duc.avid.com/showthread.php?t=279758

Perhaps other can reply with a more updated parts list optimized for VMS? Hope this helps !!!

I use 2 PCs to edit video. One is has and AMD 4 core processor and 4 gb of memory using Windows 7-64bit. The other has an AMD Phenom X6 1100T 3.3 gHZ processor and 8gb of memory. The difference is incredible. Th 6 core runs super fast.
One way to test your computer speed is to use Handbrake (freeware) to render a video. I have the CPU gadget turned on to see how well each core is being used.
The tests using both these computers and an friends Intel 7i showed interesting results. Using a 2 hr movie:
AMD 4 core = 45 minutes
Intel 7i = 22 minutes
AMD 6 core = 14 minutes.
I built my own PC to mainly edit video and pictures. I concentrated on CPU, memory and video card to spend my money. So far, I really like my setup.
Good luck building your dream machine...

^^The Intel Core i7 'Extreme Editions' are like the AMD you mentioned; 6-Cores (12 Virtual) and can render videos super fast! The problem: they costs in upwards of $1,100!

Isnt the AMD FX-8120 an 8 core proc. because AMD does not have hyper threading.
I am not sure if it is compatible with phenom 2 motherboards though.
http://www.newegg.com/Product/Product.aspx?Item=N82E16819103961

Thanks for the replies and the correction on the Phenom being an AMD processor. Best I can tell the Phenom requires the AM3 socket and the FX requires the AM3+ socket. But the AM3+ socket appears to be compatible with the AM3. Presumably it would be better to go with the AM3+ because it would be more forward compatible than the AM3.

The i7 really isn't an option at this point due to cost. I'm looking for a functioning machine that can handle hd, not a dream machine. This is a hobby for me not a source of income. Let me put it another way my current machine uses a Pentium 4 and the render time for SD for uncompressed AVI without adding any fx to the video is approximately 150% of video length. It won't even handle hd. Any machine capable of handling hd would be a substantial upgrade at this point.

> Any suggestions as to what is the best cpu would be appreciated.

Take a look at the CPU comparison charts at Passmark, e.g.
http://www.cpubenchmark.net/high_end_cpus.html

I built my wife's edit machine based on a Phenom 2 X4 965 with 8 gigs ram on a Asus motherboard. It is a really fast machine, it replaced a very long in the tooth AMD Athlon 2200+. So I presume that the FX chip will be that much faster. I need to check if my wifes MB will support the FX chip if it will I will definetly be tempted by it.

Good luck and you will not be dissipointed.