Oh, yes indeedee. The Xeon is Intel's current high end and they'll be focussing much of their development efforts on it. I've heard that they hope to do three or four processor updates for the Xeon each year for the next couple of years at least.
Based on the release of the MacPro, its currently taking less than a month for new processors to be included into the Mac lineup after being released by Intel. This is likely to be longer at times, as Apple need to clear their supply channels before introducing an update, but because the production runs of Intel processors are more frequent, and Apple can order them in smaller numbers than with the PowerPC, I'd expect that "speed bumps" will become more frequent than before.
As for actual figures, its really hard to guess. I'd say by the time Leopard comes out we'll probably be around 3.5ghz on the Mac Pro, and about 2.6 ghz on the main product lines (iMac, Mac mini, Macbook). But then, thats really just guessing.