<< Also, the price of the Xeon seems high - intended for the server market. >>
Intel sells the Xeons for $50 more than the equivalent P4 in lots of 1000. Thus the prices really aren't that much higher. However, many companies will buy P4 chips in lots larger than 1000, and get a price break. Few if any companies buy Xeons in huge lots. Thus the street price shows >$50 difference. Even so, the difference between the P4 and the Intel Xeon is negligible compared to the price difference between the P3 and the P3 Xeon.
From a link in rbloedow's link:
"Eeven though Windows 2000 and Windows XP only officially support two CPU's, both operating systems were able to run properly with the Hyperthreaded CPU's. This means you don't have to upgrade to a 4-processor OS like Windows 2000 server to take advantage of this technology."
That is certainly a relief for Intel. If Microsoft forced the Xeon users to buy the server versions of its software then overall computer prices would skyrocket.
"SiSoft's Sandra, while being a synthetic Windows benchmark, is one of the few pieces of software on the market with some level of Hyperthreading support...When Hyperthreading was enabled, we can certainly see some performance gains being had by the Xeon setups. One CPU with Hyperthreading gained 18% in this benchmark, while two CPU's with Hyperthreading gained 23%. Of course, this is simply a synthetic test, and to achieve any real world performance gains like this, the software would have to be specifically optimized for Hyperthreading."
So there is a benefit for certain users. If you have a program optimized for hyperthreading, and if that program can utilize hyperthreading, then significant free gains can be had. However, those are two big IFS.