2.66 Xeon vs 3.4 AMD, so you can't compare directly with Mhz. If you look at core for core speed, it's about 85-90%. It's essentially a C2Q Q9400:http://www.anandtech.com/bench/Product/76?vs=102
Of course you can't OC Xeon, so I agree, overclocking the 965 puts it on another tier.
Just to be clear, I'm not recommending the XEON unless you want to do something that can really pound 8 cores at once.