The answer depends on whether the application is multithreaded and able to take advantage of a second processor. Do you know what kinds of processing the application is doing (i.e. database joins, a huge amount of simple math, video codec work)?
However, since in general multiprocessor performance is not linearly (sp?) scalable (i.e. a second processor doesn't quite double your application performance) I'd tend toward the 2.2GHz Xeon, because I could then more cost-effectively add a second processor to that if necessary.
-Steve