I assume you're not using the MacRumors special installer (check the Distributed Computing forum); if you run the normal version of folding, you'll only end up running one client, which only uses one processor.
With the extra-cool installer a forum member came up with, you'll end up with two Folding processes running simultaneously, which will take full advantage of your DP machine.
I wouldn't worry about toasting your G5, but do keep in mind that unlike with some other machines the G5s use a LOT more power when they're working hard--the difference between about 170W at idle and 325W with both processors maxed out with Folding. It tears through work units if the additional power bill is worth it to you.