There are Core Duo 2's for 499.
Its the refurb price, and they are sold out now... they were there this morning (base model of course), Core 2, Combo, 2Ghz.. etc. Remember this bases for $599, so am nearly 95% sure it was that model this morning for $499.
Granted you are correct about the video card, a GM950 is poor, but for encoding and power consumption the G5 scores poorly.
I know, I sold my G5 DP 2.0, and replaced it with a 1.5 Core Solo which outperformed the aforementioned G5.
For gaming tho, the G5 will be a better choice if you upgrade the video card.