Which Build is better?

Solution
The 4790k is better than the xeon in terms of performance. The 4790k is overclockable while the xeon is not. You do need a better mobo than the one included to overclock the i7 though, which would cost more, and the gains from oc even in gaming isn't much to justify the cost.

If you're going to go down the road of xeon, the xeon e3 1231 v3 represents a much better value for the money.It's basically a locked multiplier i7 4770 without the integrated graphics. And since you're not overclocking the xeon, you can pair it with a cheap reliable mobo like the gigabyte b85m-d3h. The mobo will not affect performance. Plus you can save money by using the better variant included stock cooler in the cpu box.
 


What if I just change the i7-4790K to a i5-4690K as its only 0.5GHz (stock) difference and its much cheaper

 


For gaming you won't see much of a difference between an i7 4790k and a i5 4690k. The i7 4790k however, has hyperthreading.

Also to answer your question, the first build is better.
 
Solution
The i5 4690k would be the best bang/buck overclocker gamer cpu. With a decent aftermarket air cpu cooler like the hyper212 evo, you can overclock it to 4.4 GHz. The stock clock speed difference doesn't really matter. Using a devil's canyon processor at stock speed is just silly for the extra cost you're paying over a lower clock speed locked i5, though even at stock speed the 4690k can pretty much handle any titles you throw at it since its a strong true quadcore.

Hyperthreading in this case doesn't really affect gaming performance. Unless you're doing sth like rendering using vegas pro while playing Far Cry 4, and expect the game to be playable and decent rendering time, or spend lots of time on professional editting, you don't really need hyperthreading.