Core 2 vs Xeon for development use

I'm trying to understand the significant differences are between the
normal workstation-type processors (Core 2 Duo, Extreme) and the
comparable core-count Xeon chips. Xeons appear to be oriented to
server use; why is that?

I'm looking into getting a new machine. This is not for gaming; it is
for my main development/daily use machine where I run 20-30 apps
concurrently all day long, including file sharing, compilers, music
playback, disk backup, photo editing, and more. Dell offers machines
with both Core 2 Duo and Dual-core Xeon.

Would Xeon be a better choice for me? I'm pretty sure quad core would
be pretty effective for my use.

To be sure I'd get the most out of these processors, I'd want 64-bit
support so I'm planning on Windows XP x64 (I will NOT do DRM with
Vista). Linux would be an option if a Windows virtual machine will
work on it easily (I don't have time to fool around with i)t. Are
programs generally compatible with x64, or are there issues?

Advice and/or references appreciated!
thanks
tbone