I built a Core i7-950 box just a few months ago and it's purring at 4ghz. I don't see any reason to upgrade to Sandy Bridge quite frankly, I don't encode videos that much.
There is, however, no longer any reason buy AMD above the $200 price point or so. If you get an unlocked "K" series processor you can destroy AMD in every possible performance category that exists. Intel seems determined to force AMD to bottom-feed forever by only selling locked Core i3 processors, thereby giving the poorest OCers a reason to buy AMD presumably ensuring AMD's survival and prevention of antitrust action against Intel.