We're looking to add server-side encoding a la YouTube to our site, for a private community. We'll likely need to support a wide variety of input formats, much like YT.

I took at look at On2's Flix Server, pricey, but probably the best option. How does FFMPEG stack up in comparison, and does Flash Media Server do the same with uploaded files, or only streams captured from the player?

Also, what kind of overhead are we looking at, let's say at most a couple of dozen clips a month at first will get uploaded and crunched. Dedicated box? How powerful? Do we need to create an encoding queue, and notify people when their video is ready? (I've never uploaded to YT, so I don't know how they handle it.)