Performance between the Xeon and Core 2 Duo processors cannot be compared as they are different. Xeon is a Server processor, Core 2 Duo is a desktop / notebook processor.
Unless you are specifically building a server (which I gather you aren't, from this thread information), stick with the Core 2 Duo
That PSU is a much better choice. The Corsair PSUs are known for their good quality, but 450W is not very much these days. I'm sure it will be fine for your system, but you won't have much upgradeability options without first having to upgrade the PSU. If this doesn't worry you, then it's no problem. Only you know your budget and circumstances for using the computer (and also potential future upgrades).
The reason I asked was that I have read alot of articles saying that the xeon 3110 is the same as a core two duo e8400 except for the name and some other minor differences.