That's pretty cheap, most 1366 boards are absurdly expensive and make old Xeon systems impractical.
The i5, especially once overclocked, will have a huge single-threaded performance advantage, so it will undoubtedly be a better gaming and general desktop CPU. For anything that can utilize all of the Xeon's cores, they'll greatly outpace the i5.
PCIe 2.0 will not have a significant negative impact on GPU performance.