In terms of overall gaming performance, the Intel Xeon E5-2450 v2 is massively better than the Intel Core i7-880 Quad 3.06GHz when it comes to running the latest games. This also means it will be less likely to bottleneck more powerful GPUs, allowing them to achieve more of their gaming performance potential.

The Xeon E5-2450 v2 was released over three years more recently than the Core i7-880 Quad, and so the Xeon E5-2450 v2 is likely to have far better levels of support, and will be much more optimized and ultimately superior to the Core i7-880 Quad when running the latest games.

Both CPUs exhibit very powerful performance, so it probably isn't worth upgrading from one to the other, as both are capable of running even the most demanding games at the highest settings (assuming they are accompanied by equivalently powerful GPUs).

The Xeon E5-2450 v2 has 4 more cores than the Core i7-880 Quad. 8 cores is probably excessive if you mean to just run the latest games, as games are not yet able to harness this many cores. The cores in the Core i7-880 Quad is more than enough for gaming purposes. However, if you intend on running a server with the Xeon E5-2450 v2, it would seem to be a decent choice.

The Xeon E5-2450 v2 has 8 more threads than the Core i7-880 Quad. Both the Xeon E5-2450 v2 and the Core i7-880 Quad use hyperthreading. The Xeon E5-2450 v2 has 2 logical threads per physical core and the Core i7-880 Quad has 2.

Multiple threads are useful for improving the performance of multi-threaded applications. Additional cores and their accompanying thread will always be beneficial for multi-threaded applications. Hyperthreading will be beneficial for applications optimized for it, but it may slow others down. For games, the number of threads is largely irrelevant, as long as you have at least 2 cores (preferably 4), and hyperthreading can sometimes even hit performance.

More important for gaming than the number of cores and threads is the clock rate. Problematically, unless the two CPUs are from the same family, this can only serve as a general guide and nothing like an exact comparison, because the clock cycles per instruction (CPI) will vary so much.

The Xeon E5-2450 v2 and Core i7-880 Quad are not from the same family of CPUs, so their clock speeds are by no means directly comparable. Bear in mind, then, that while the Core i7-880 Quad has a 0.56 GHz faster frequency, this is not always an indicator that it will be superior in performance, despite frequency being crucial when trying to avoid GPU bottlenecking. In this case, however, the difference is enough that it possibly indicates the superiority of the Xeon E5-2450 v2.

Aside from the clock rate, the next-most important CPU features for PC game performance are L2 and L3 cache size. Faster than RAM, the more cache available, the more data that can be stored for lightning-fast retrieval. L1 Cache is not usually an issue anymore for gaming, with most high-end CPUs eking out about the same L1 performance, and L2 is more important than L3 - but L3 is still important if you want to reach the highest levels of performance. Bear in mind that although it is better to have a larger cache, the larger it is, the higher the latency, so a balance has to be struck.

The Core i7-880 Quad has a 768 KB bigger L2 cache than the Xeon E5-2450 v2, but on the other hand, it is the Xeon E5-2450 v2 that has a 12 MB bigger L3 cache than the Core i7-880 Quad. In this case, the L2 size is probably what counts, so the Core i7-880 Quad is likely superior in this area.

The maximum Thermal Design Power is the power in Watts that the CPU will consume in the worst case scenario. The lithography is the semiconductor manufacturing technology being used to create the CPU - the smaller this is, the more transistors that can be fit into the CPU, and the closer the connections. For both the lithography and the TDP, it is the lower the better, because a lower number means a lower amount of power is necessary to run the CPU, and consequently a lower amount of heat is produced.

Both the Xeon E5-2450 v2 and the Core i7-880 Quad have the same TDP of 95 Watts, but the Xeon E5-2450 v2 has a lower lithography size, and so will affect your yearly electricity bills less adversely.