Depends on what you'd be using it for really. Though fwiw, I'd have to point out the Xeon ultimately offers more value and options than the I5 does. Bear in mind it's still possible to find workstation boards for the x5650 with dual sockets for somewhat reasonable prices. It also supports triple channel memory whereas the I5 supports dual. Like the I5 2500k, you can overclock the x5650, though OCing the xeon may involve more difficulty and time than would the 2500k. Here's a reddit thread on OCing the x5650 that may be helpful should you choose to go with it https://www.reddit.com/r/overclocking/comments/2ua6yb/how_to_get_more_out_of_my_overclock_xeon_x5650/ or search "how to get more out of my overclock xeon x5650".
The 2500k has notably better single core performance, and includes integrated graphics, though it also has two less cores than the xeon, and no hyperthreading. The x5650 has no integrated graphics, but has 12 MB smart cache vs the 2500k's 6 MB. Both processors could be used to make decent gaming platforms, though if its strictly for gaming, I guess the 2500k might make an overall easier and more sensible choice.