I am using two Xeon Quad-Core X5410s just fine with Proxmox VE. Yours would just be the same core/generation at a higher clock speed.
I am currently running Win2k Server in production in a KVM and I have also started up WinXP numerous times just to jack around with it and it has always been insanely fast and never had any problems installing windows updates, rebooting, browsing web, etc.
I am also running a little 512M-of-RAM FreeBSD 6.3/i386 server in production in a KVM, this 8-core Proxmox VE box has been incredibly useful. I needed a FreeBSD 6/i386 box real quick because I had an ancient piece of software that wouldn't run under FreeBSD 7/amd64 and I was migrating the entire existing box over. So.. I magicked up a free "legacy server" out of thin air, no extra electricity or heat or rack space.
Just be careful to manually change the MAC address of your virtual NIC for each new KVM you create by changing /etc/qemu-server/NNN.conf like so:
Code:
network: macaddr=52:54:00:12:34:57,model=e1000,tap
...and the next one would be macaddr=52:54:00:12:34:58 and so on.