I use MakeMKV to rip. Then Handbrake if I need to compress (although I leave most everything in its original format, large file size and all, mostly because I'm too lazy to convert so many movies and episodes, and because storage is cheap).
I've been using Plex for a couple of years. Here are my observations.
Plex will say that if the client machine is capable of transcoding (CPU-horsepower-permitting), it will. I have a G550T-based Plex server, and when viewing a movie (DVD, not bluray) via the Plex internal website, I see 80-100% CPU use on the server, with the client being an i3 or Phenom II X4. In other words, the local machine should be doing the transcoding, but Plex is still doing enough work to stress the CPU. No one on the Plex forum seems to be able to explain this sufficiently to satisfy my curiosity.
On my wife's iPad, which can't do local transcoding, Plex goes to 100% CPU use and stays pegged when she watches something.
Right now we can do 2 streams at the same time from the Plex server without stuttering on the clients, one on an iPad and one on an i3 laptop. If I use my Phenom II X4 desktop, all clients experience stuttering and the sysload on the Plex server climbs high.
I am going to add an HTPC and an LCD TV to the living room eventually, and when I do, I am going to upgrade the Plex server to a Xeon.
There is a Plex local app that you can install; I have played with it a little but have not yet looked at server-side CPU use while a client is playing something.
In short, buy more CPU than you think you need, especially if you have low-CPU-power tablets in the house. Eventually you will end up using them as clients, and the server needs to be able to handle the transcoding.
I tried running Plex on my unraid server; Athlon X2 250, fail. Tried it on Atom (was just curious), fail. Tried it on Core2Duo, fail. The Celeron 550T is handling things for now, but will need to be upgraded eventually.
I also periodically experience the need to reboot the server, or restart Plex server process, as clients that were watching something fail to completely terminate the connection, and the server ends up with a sysload above 9(!!!) even with everyone in the house asleep. I am running it under Ubuntu 14, but will probably switch to Mint when I upgrade.