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The general consensus from dedmon's simulator on shadowpriest.com is that the 1:1 break even point is around 1400 buffed +spelldmg.
The 1.2:1 ratio would be at around 1600 buffed.
As to how this applies in practice, who knows, but generally the rule of thumb is to assume 1:1 if you're at the 1400 buffed mark at least and to socket all red and blue sockets with spinels, and only socket yellow sockets with pyrestones if there are no blue sockets on the item and the set bonus is at least 1dmg + 1dmg per yellow socket, otherwise use another spinel.
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