Nevertheless, I still think it's a massive rip-off. Of course, my opinion might change once the Nehalem Xeons become publicly available and I can get an idea on the price. I haven't really looked at the specs too much, though, to get an idea of what's different between the 2.66 GHz i7 and the 2.66 GHz Xeon. Maybe when I get home from work I'll check into that.
Supplies are likely to be tight in the first few months for the higher-spec parts, so only tier 1 vendors like HP, Dell, Apple or Sun will get them at first.
The main difference between a Xeon and a Core i7 is ECC and faster QPI links, and dual-socket capability on the 5500 Xeons.
There's a lot of pent-up demand for the Nehalem Mac Pros. I ordered mine to replace a 5 year-old Dual 2GHz G5. Apple will keep prices high in the short term until the chip supply eases.