Hi
The hyperthreading features of the Xeon range and faster Pentium 4's will allow each physical CPU to emulate two, because of the way it works it is possible to get more data through the system simultaneously that way, but the speed it would do it is slightly reduced.
Whether it is gives you a performance benefit depends on the applications that you run on the server.
For example, with a 2 CPU server, the operating system would see 4 processors. (important note: it would also require a version of the operating system licensed for 4 processor use).
You could try going into the BIOS setup on the server and see if it Hyperthreading is enabled or not. This would allow this theory to be eliminated, but would of course need the server to be rebooted.
John