I don't see any reason why it wouldn't work, but I don't know if that is the best option in the price range either.
I looked around online and people suggested looking at the motherboard manufacturer's materials to see if its a compatible processor.
That being said, the P67 boards with updated BIOSs can usually take Ivy Bridge chips or at least high end quad core ones like the 2500k.
Unless this is a business oriented PC where absolute perfection is worth a premium over 99.9999999% perfection, then I would stick with either the Sandy Bridge or Ivy Bridge chips instead of the Xeon server processor.
Even if you got the Xeon, it would probably require different RAM if you were upgrading from a more desktop oriented processor like a...