Xeons *were* historically "inferior" for the most performance-demanding applications, especially non-multithreaded ones, because they have generally been lower clocked (including bus speed) as compared to their desktop/workstation brethren. They tended to be upgraded at a slower rate as well. This is all theoretically in the service of maximum stability - more rigorous testing is supposedly done for server-level CPU's and so they clock them lower because fewer of them can pass the rigorous tests at higher speeds. Not sure if I buy that, but there you go.
In any case in the past the disparity between Xeon (server CPU) and desktop CPU's was greater. Now they are based on much closer fundamental architecture and are more on parity in terms of performance. You do pay a good premium for Xeon baseline hardware, but the CPU's seem roughly price-competitive I believe (maybe a slight premium per clock). The thing is with Core 2 Duo and now quads, you can have a dual or quad core system in a workstation case with other normally aspirated components for the same or less than a Xeon system - the Xeon offers little advantage in that case. The only upshot of it is you can pack even more into a Xeon *if* you have the money - e.g. dual quad cores. Me I'd still go for a Core 2 Duo (or quad core if I could afford it), but if you're really interested in Xeon the Mac Pro's may actually be the cheapest way to enter that market from a major retailer (building it yourself may be cheaper).
- Oshyan