First, in answer to your questions:
1: Yes, of course this would be a "good system". The "best" system? No, but then that also depends on how much money you are willing to spend. You can always get something better. Personally I prefer to go for best price/performance ratio. In this case in fact buying a simple Core 2 Quad (*not* Xeon) is really the best bang for your buck. Especially since Nehalem is coming. So I'd wait, if you need an upgrade now buy a quad or a cheap Core 2 Duo, and see what Nehalem brings.
2: The max speed quad Xeon available rightnow is 3.16Ghz I believe, though this is Harpertown and LGA 771, not Socket 771. Not sure why you're tied to Socket 771 though. Harpertown is going to be less power hungry at equivalent clock so it's worth going for if possible. Otherwise the fastest Clovertown is 3.0Ghz, but uses 120W vs. the Harpertown equivalent's 80W for the same speed.
3: Harpertown is LGA 771. Not sure if it's compatible with 5000x. Do you already have a motherboard?
- Oshyan