This paper presents our studies on the effects of using SIMD processor extension developed to enhance the processor performance for streaming applications. Our approach was evaluated using MPEG-4 encoding application as benchmark. Although MPEG-4 consists of many different operations, we concentrated on the Sum of Absolute Differences (SAD), a major part of the motion estimation. The SAD was chosen because it is one of the most frequently used operations in MPEG-4 encoding. It is estimated to consume between 40%-80% of the total video encoding time when implemented on a general purpose processor. We have performed an extensive evaluation of our architecture extension. This evaluation showed that it is possible to achieve high performance with acceptable power consumption. We obtained about two times performance improvement for MPEG-4 encoding with roughly the same power consumption.