The 8400 Series Desktop is about $500 less than their 370 workstation price for about the same processor.

Is there really any performance difference for video editing

Currently have a P4 1.4MHZ 1GIG memory

1- Performance difference:
No, unless the workstation has:
dual Xeons
PCI-X or PCI express slots for RAID controllers. You need a really expensive RAID before normal PCI limits you. For DV/DVCAM/mini-DV/DVCPRO25, you do not need any RAID at all (it doesn't really make a performance difference).

2- Dell is overpriced on most systems. You can get an equivalent if not better system for typically hundreds of dollars less, and thousands of dollars less if you put on all of Dell's overpriced upgrades.

There are some deals on low-end/basic Dell systems, but you have to know where to look.