The similarities between the i5-3570k and the i7-3770k which are relevant to video encoding are:
- GPU: Both chips have the "same" on-chip GPU (it has the same min/max clock frequency and the same number of execution units; this is very important if you want to use Intel QuickSync Video for hardware-accelerated encoding/decoding)
- Same instruction set / supported processor instructions
- Same number of physical cores
The differences between the i5-3570k and the i7-3770k which are relevant to video encoding are:
- CPU Clock rate: 3770K faster clock rate means on the order of 10% faster at CPU operations
- Hyperthreading: 3770K has it; 3570K doesn't. Hyperthreading provides a small performance boost for multithreaded applications. Certain video rendering operations can be done in parallel by well-designed software so this may make a slight difference.
- L3 cache size: 3770K has 8MB, 3570K has 6MB. More cache significantly increases performance on workloads such as this, because more work can be done within the processor itself without even going out to RAM.
You will see an absolutely enormous performance boost from the Core 2 generation to either one of these CPUs. The main difference is that you may be waiting for a rendering job for an hour and 2 minutes instead of an hour if you go with the 3570K.
As for deciding between more RAM and a 3770K, I'd go with more RAM. The disk may end up being the limiting factor if you are working with big files; lots of RAM allows the system's page cache to load most/all of the file into RAM, thus reducing disk grinding during encoding, and eliminating the disk as a potential bottleneck. The disk can easily be the slowest component of a rendering pipeline when you are using hardware-assisted encoding such as Intel QSV, which on my 3770K takes about 20 minutes to encode a 45 minute Full HD video into H.264 using ArcSoft Media Converter. That's with the source media and the destination file on a ramdisk to prevent the HDD from getting in the way.