Despiste being new to Plex, i tested 5 transcoding clients simulaneously.... that ended up in 100% cpu on a i7-2600k. ram usage was insignificant.
Media was 1080p 5.1 DTS mkv and was transcoded to a surface rt (1stgen), 2 windows phones (lumia 820 and 920), a 55" panasonic plasma (that one ist connected to the PI ) and on the machine itself (via web Interface)
If you have clients that support the file format, then direct play is quite nice (MKV is supported by my pana) because it results in low CPU usage. The phones produced the most CPU usage, which is - eventually - caused by subtitle rendering.
So transoding for 5 clients simulaneously can end up by using a i7. If you have TV's that support your most used file formats you could end up using an i5.... an i3 would be nice.... but i think it will simply not work with 1080p.... can't tell anything for 720p
Your CPU will not be the issue, your upstream bandwidth will be. You said you have 1Mbps upstream from your provider so a 384Kbps stream with IP overhead, let's round to 400Kbps. 400 x 2 streams before you get a degraded image. 384Kbps is the minimum resolution you need for an OK viewing experience.
I am very familiar with this since i am limited to 2Mbps. I have put my server in the cloud for my friends and family... then i use directplay for them to reduce the expensive cloud CPU.
Your CPU will not be the issue, your upstream bandwidth will be. You said you have 1Mbps upstream from your provider so a 384Kbps stream with IP overhead, let's round to 400Kbps. 400 x 2 streams before you get a degraded image. 384Kbps is the minimum resolution you need for an OK viewing experience.
I am very familiar with this since i am limited to 2Mbps. I have put my server in the cloud for my friends and family... then i use directplay for them to reduce the expensive cloud CPU.
i am waiting till fiber gets here. 60mpbs upload when that happens.
Another data point from me: I have a quad core i5, and that's perfectly happy transcoding two simultaneous 1080p streams down to 720p (for two Roku's at family members). Each takes less than 1 core, so I suspect 4x 720p streams would be fine in terms of CPU (though I only have 10 Mbps upload so wouldn't be able to do 4 simultaneous ones)...