I'm feeling lucky... completed my upgrade early this week to x5355 2.66 GHz SLAEGs (200USD for the pair, used from ebay--insane bargain) and haven't had any problems at all. No KPs, no other problems. I run little snitch 2.4.1 (2051) without incident. OS is 10.7.2 11C26, SMC version is 1.7f10 (the updater mentioned earlier in this thread said I didn't need it). I did the CPU injector routine and the procs are reported as "quad core xeons" without the 5355 part.
The hardware monitor reported temps are fairly warm but to me not particularly alarming, but I haven't had any KPs either. At factory default fan speeds, ambient around 22C the 8 procs like to idle in the high 40Cs. Sustained full load the system kicks up the fan speeds when the cores get into the 80C range and they stay pretty stable--fan speeds never get above about 750 RPM though. I put in an SMC profile that ran CPU at 800 and rear fans at 900 then had it run overnight at full load reencoding the 20k songs in my music library. I've done this this 2 times with shutdown and cool off in between and the temps at full load were in the high 70Cs. The computer didn't need to raise the fan speeds at all. I suspect that the OS monitors the fan speeds at the heatsinks and only kicks up to keep the heatsink at proper temperature. If you're not looking at core temps, the cores could be much hotter.
I used AS5 for the thermal compound so it's still "breaking in", but I did notice that the core temps have evened out now--they used to differ by 10C or more but now they're within a few degrees of each other. I'm probably going to pull everything apart again and replace the AS5 with noctua NT-H1--I used the AS5 because the procs arrived before the noctua and I couldn't wait! But it may not be worth the effort as I only expect a degree or two difference, unless my horizontal-line application technique of the AS5 wasn't "good".
Geekbench-32 (I need to pay those people!) went from 5207 stock to 9422 so in general all is as expected.
I don't have any definitive help for you because so far I've been blessed... but if it were me I'd suspect that my thermal compound job isn't good enough. Checking core temps with Hardware Monitor is important, you don't want to rely on the heatsink temp because if the thermal connection between CPU and heatsink is less than optimal the core can get quite hot in relation to the heatsink. And depending on the core temperature, it could cause problems... at least in my case high 70s were still stable.