This article states that the Xserve (Early 2008) takes FB-DIMM 667MHz when I believe it takes 800MHz FB-DIMM...am I correct?

you are correct (at least according to these three sources)

everymac.com = ECC DDR2 FB-DIMM RAM Speed 800 MHz

crucial.com = 800 MHz FBDIMM DDR2 PC2-6400, DDR2 (ECC)

apple specs = 800 MHz DDR2 ECC fully buffered DIMMs

i read that you can use the 667s -even though the specs say 800 - you loose a little but the 667s are cheaper , but i don't if it would be worth it -- i guess pencil it out but I am staying with 800s. I have 2 of the 1gb sticks original from the my early 2008 if any body has a use for them - you can have them for shipping cost or trade for some of equal or lesser value.