Can i update my Mac. 2x 2,66 GHz Quad-Core Intel Xeon?

Choose About this Mac from the Apple menu, click on More Info, then System Report, and check the model identifier.

If it's MacPro1,1 or MacPro2,1, no.

If it's MacPro4,1, yes.

(124676)

What model do you have?

System report will say

Do you have 2 dual-core 2.66 processors? If so you have a MacPro1.1 (and 2.1) which ca only go to Lion without a hack.

With a hack it can go to Yosemeite.

http://oemden.com/sixty-four-on-thirty-two-sfott/

Install OS X Mavericks on Mac Pro1.1

The 3.1 and later can go to Yosemite with no problem

If you want 8-cores, 5355 set is one thing, yes.

Biggest improvements come from SSDs. Even a $69 128GB EVO 850 for the system. Or $128 for XP941 128GB w/ PCIe adapter.

GPU options there are some there but harder to say which. http://www.macvidcards.com

RAM: 2x2GB sets for $19 on Amazon - DDR2 667 FBDIMM Mac Pro

1-2TB hdd for data of course.

And for adventurous there is SSFOT to install Yosemite if you have a copy and can follow steps

http://forums.macrumors.com/showthread.php?t=1740775