The prices aren't that different, so take memory into consideration (see below).Google product searched and found that there is not much in the price between the Core i7s and Xeons, sometimes even the xeons were more expensive.
If you plan to keep using any existing memory you have now, then the Xeon is likely the better choice overall.
Depends. Are you willing to swap out the memory for non-ECC DDR3?Given that Core i7 is faster and apparently less expensive it would be the superior choice?
Assuming this is the case, take the memory cost into consideration as well (you can't mix different memory types; UDIMM, RDIMM, non-ECC DDR3 must all be the same).