I can't comment on a G5 X5355, but I've got a G6 Dual X5650 box that I use for FreeNAS (with plex etc) and I can happily transcode loads of streams. Its almost impossible to saturate an entire CPU, let alone both. Previously I've used several different Xeons from this period and all of the X and L series models work great on Plex.
Looks like my X5650 is about 25% faster on single thread than an X5355 but then obviously its 4core vs 6C/12T.... and I've got two of them.