The 1.25 is probably OK for light to moderate usage, but the extra cash for the second processor is justified. Personally though, I'd consider a G5 1.8, if you're truly considering a dual G4 1.25 with all the fixins. Let's configure them similarly:
1.8GHz PowerPC G5
512MB DDR400 SDRAM (PC3200) - 2x256
160GB Serial ATA - 7200rpm
ATI Radeon 9600 Pro
56k V.92 internal modem
Combo (CD-RW/DVD-ROM)
Apple Keyboard & Apple Mouse - U.S. English
Subtotal $3,174.00
Dual 1.25GHz w/ 2MB L3 Cache per processor
512MB DDR333 SDRAM (PC2700) -1 DIMM
160GB Ultra ATA drive
NVIDIA GeForce4 Titanium dual-display w/128MB DDR
56K internal modem
Combo Drive (DVD/CD-RW)
Apple Pro Keyboard - U.S. English
Subtotal $2,924.00
The only problem with the single 1.8 is that you can't spec a smaller hard drive or less memory.
What do you plan on using it for?