There are effectively two lots of Pentium III XEON processors, with very different capabilities.
Pentium III XEON processors with 256KB of L2 cache are effectively repackaged Coppermine processors in a Slot 2 form factor, which are limited to two processors, and really don't have much benefit over standard desktop Pentium III Coppermine processors.
The second lot of Pentium III XEON processors (mainly around 700MHz) are available in much larger cache sizes....these are Cascades processors, with large caches and the ability to go more than 2-way SMP.