Xeons are just Intel's server CPUs, like Core 2 are Intel's desktop consumer level CPUs.
Some say that the prefetchers in Xeons are tuned more towards server applications, making them slower at desktop applications, but this has not been confirmed AFAIK.
Usually there isn't much of a difference between Intel's current desktop line and their Xeon line in terms of specs, but most Xeons use socket 771 so aren't compatible with desktops.
Like Vir, I also have a socket 775 Xeon - it's basically a Q9450. Bought it because they supposedly overclock better and I wanted something a little different, but meh, the difference is neglible IMO.