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It's always better to scale horizontally rather than vertically when possible.
Putting one huge server in the place of a fault tolerant cluster is assinine. It will end up costing more, and you will have a single point of failure.
PC gear is cheap, clustering is the way to do with web apps, since it's so easy to do.
Single vs. dual is just up to your requirements. How much do you pay for space and power? I know we'd do all dual webservers, to save on (Expensive) datacenter space.. But you may have a different situation.
If space, power, and cooling were not a consideration I'd definitely go with double the single CPU machines. More fault tolerant (you can have more machines die w/o anyone noticing), and will actually give you more performance than 5 duals.
peace,
-Phil
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