I think European pricing is a bit different from the US. It's definitely a different market.
http://www.macofalltrades.com/Apple_Desktops_s/2.htm
That's just an example, and it's a retailer, not a private seller. In the US $700 would definitely be a bit high present day. CPUs have definitely shot up in power the past few years. Unfortunately laptops are still a bit limiting for me. The annoying thing is that the shrinking volume has definitely inflated the price of workstations a bit. Apple obviously raised pricing on theirs at comparable builds. A couple of the others seem to have crept up too.
The G5 quad can take 16GB of ram, but the mac pro would make more efficient use of it. To explain that, you can run up to Leopard on the G5 (although they didn't do that great of a job in Leopard optimizations for the PowerPC models compared to Intel machines

. Snow Leopard was where we started to see 64 bit applications. Even with Leopard applications couldn't really address beyond 3-4GB individually in a direct manner. They sometimes cached to ram rather than swap, and the OS could eat extra ram if it was available. You just didn't see the advantage that you could see from that amount of ram on a newer machine due to those limitations.