Yes, and like someone else mentioned, you were probably looking at a comparison of 8800GT 512mb with the 8800GTS 320mb. Get the
8800GTS 512MB and you will see greater performance than that of the 8800GT in any game.
Can I ask why you are choosing the Xeon to begin with? As far as I know, that's more meant for a server, not a gaming processor. Unless you already have the Xeon from an original build, or can get it pretty cheap, it's basically the same as the Q6600 and the Q6600 is cheaper. The only differences I see from looking at Newegg is that the Xeon runs at higher voltages (which means higher temps) and has no L1 cache. Not sure if that would really affect things much, but in all instances it appears that the Q6600 would be better.