The Pentium is intended for the needs of the general public and everyday user. It is optimized for single processor use. The needs of the everyday user are different from that of a power user or a server and that's why Pentiums is designed for the every day user. Pentiums processor often has less cache memory than Xeons processor.
Xeon is intended for servers where the demands for a processor is a lot higher. Xeons are to be used in groups. It is better suited for multi-threading than Pentiums. It is important to note that Xeons Pentiums and Xeons have different socket types.
There are several major differences when it comes to the Intel Pentium processor and the Intel Xeon processor. The Pentium processor is the one that is in regular desktop computers where the Xeon processor is always located in servers. The Pentium is always used as a single processor where the Xeon is designed for mulitple users thus its use in a server. With the Pentium being smaller and for smaller usage, it has a lot less cache memory than the Xeon processor does.
Another big difference between the Pentium and Xeon processors is that they both have different socket sites. There is also the difference of the Xeon being best suited for multi-threading. A good analogy to describe the difference between the Intel Pentium processor and the Intel Xeon processor is comparing a small car to an oversized van or SUV. One is bigger and has more ability than the other one.