The x5650 provides 6 cores at a higher clockspeed (2.6GHz) and is built on the 32nm processor (this will likely mean less heat and better overclocking). It also has a 95W TDP.
Dual E5520 will provide 2 cores more than the first option but at a lower clockspeed (2.2GHz) and a total TDP between them of 180W.
Personally, in most cases, I would go with the 6-core single socket if money is not a problem. Plus it would allow for a possible upgrade to 12 more powerful cores by getting a second one for your motherboard in the future.
For performance though, the 6 core would be better in applications that cannot utilize more than 6 cores. The dual e5520 would perform better for applications that can utilize more than 6 cores.
I still recommend the X5650. Dual E5520 makes sense only if you run lots of VMs on the server (you won't) or if you can keep all cores busy close to 100% of the time. If not, then a single X5650 will be better and much faster when running few threads and Turbo is active.
Is a good guestion, the x5650 vs dual e5520s... I am asking myself that question too. To my mind it really also comes down to economy... and to whether or not one might add a second x5650 in the future.
The programs you are using sure can use alot of processor power... so that might in itself speak for choosing the x5650.. (simply because that has the highest "max cpu power" if you later add another one, for 12 cores @ 2.66)
Another important question is if you are able to overclock the cpus? I gather not, as no DUAL socket xeon boards offer overclockability yet, as far as i know (please inform me if im wrong!), except the evga sr-2 that isnt out yet.
If you ARE able to overclock the cpus on your motherboard i would say that really improves the cost/performance of the e5520s as these overclock well (and are cheap :-) ).
Just want to add, that you could go a an "in-between" option, and go for dual e5620 !
That is 2.4Ghz and quadcore. Its actually only slightly more expensive that the e5520 and does have the advantages (like the x5650) of 32nm process, and a huge 12mb cache (the e5520 has 8mb cache). I think it should overclock better than the e5520 too (that is speculation though, and not really relevant)
Its nots a big improvement over the 5520, but if you can get them only slightly more expensive it might be worth it.
Even i'm about to build a new workstation & trapped in same situation. But after long Q&A sessions, i'll choose & recommend X5650. If you go by CPU benchmarks then DUAL E5520 or i7-980X is not a bad deal either.
I'm about to start studying 3D Animation, using 3D Studio Max, Maya and so on. Going by the results below I will be going with an X5650 as I can't afford an X5680, and it craps on a X5670, and not far off the X5680 when overclocked. Not only does the X5650 overclock better, but it is future proof as all you do is add another one when you need it. By then more overclockable dual processor motherboards will be out and a 2nd X5650 would be cheaper.
PassMark - CPU Mark
High End CPUs - Updated 19th of October 2010: