This is a really interesting update for me...
Nehalem is clearly the 'architecture of the future'. Massive memory bandwidth, QPI, etc. will define the next couple years of desktop computing.
This particular set of hardware and price points introduces some real challenges for buyers, however.
To buy into the new architecture, you either need to accept a 4-core CPU with an 8 Gig RAM limit at a modestly expensive price for the base machine, or seriously pile on the $$$ for a 'full' implementation with 8 cores and a 32 Gig RAM limit.
Given that the previous generation offered 8 cores and 32 Gigs of RAM at the same base level pricing, and this tech has been around for 18 months or so, it's a huge bummer of a situation for the base model buyer who has been waiting for a compelling upgrade. You could have bought the previous-model Mac pro a year and a half ago, and been enjoying the benefits the entire time.
I'm a great example of a base-model buyer - until the Mac Pros came out, I bought bargain-basement towers from Apple when they were discounted as new models came on the market - Quicksilver 800mhz, MDD 2x 867, G5 2x2.3... All bought for around $1500-1700. I've moved down into iMacs since then, as the $2000+ entry price for Mac Pros just isn't justifiable for my enthusiastic consumer needs.
Now, instead of a model which is a compelling path forward, Apple has put the base-model buyer in a really rough spot. At the exact same price point, you can buy the older architecture with a larger RAM capacity and twice the cores, or the new architecture, which is very slick indeed, but with only 4 cores and 8 gigs of RAM, may well have a limited future life.
Unfortunately, the only real path out of this mess is to go buy the 8-core Nehalem machine, with an entry price of $3,300 - a price that's realistically out-of-reach for consumers, most pro-sumers, and many marginally profitable pro users.
Everyone else needs to VERY carefully figure out whether to move into the iMac - an OK consumer machine, but the upgrade price is steep, since you're replacing a $1500 machine, instead of a $600 CPU each cycle; or buy the previous 8-core Mac Pro, forgoing the Nehalem architecture, or buy into the Nehalem architecture and forgo the extra cores and RAM.
It's a stone-cold bitch of a decision, especially with Snow Leopard on the way, which may bring substantial increases in multi-core/GPU utilization via Grand Central, and with the knowledge that this round of updates is probably it for Mac Pro through mid-2010.
For someone with a Dual G5 they've been holding onto for the last year, waiting for this upgrade, it's an ugly situation, with price/performance/future growth considerations that you're going to have to live with for the life of the machine.
Personally, I'd say you either need to pony up for the 8-core Nehalem, or see if you can find the previous 8-core model at a discount in the coming weeks. It'd just hurt too much to pay full boat for an 18-month old model, and the 4-core/8gig machine doesn't seem to me to have a 5-year future.
Edited to correct 16-gig limit to 32. Don't know what I was thinking. Perhaps it was too much for me to accept that the 'new' machine was limited to 1/4 the RAM of the previous model, and the same 8 Gig maximum that the original G5 1.8 single-core PowerMac had in 2004!