All of your answers are already in here, so I'll be brief, and you need to use the search box at the top left area that only searches this forum.
1. You can only use the processors that are listed in the QuickSpecs document for your xw6400 workstation, latest version. And, roughly 10% of the xw6400 motherboards cannot run the E5345. The only good way to be sure is to try, and those processors are cheap enough now used on eBay to buy one to test with, and if it does work then get a second and add it in later. I have posted that the -002 version of the heatsink is the one to aim for on eBay if you need a second one for your second processor.
2. Always use the latest sSpec code... for the E5345 it is SLAEJ. Search for that in eBay and buy used. Virtually always they will work fine if used. If you can run 1 SLAEJ you can run two. They are cheap now, and you always should run two. If you cannot run a SLAEJ then run the E5160 dual core processor.... latest, and two of them.
3. Memory.... run at least 4 sticks of 2GB each. Even better, run 4 of 4GB each. Use used eBay HP memory only.... it is so cheap now, and better by it being "binned" by HP.
4. Load your W7Pro64 build onto a SSD. Best for you is Intel 320 series 300GB off eBay used. Or, the 160GB version of that SSD. Use the Intel ToolBox software 3.3.3 to upadte its firmware, tune it, and optimize it.
5. Graphics card.... buy used FX3700 or (somewhat slower) FX1800 off eBay.... those both are Quadro cards... more than fast enough and rock solid. If you use the FX3700 you'll need to give it extra power in via the 6-wire supplemental PCIe x16 power cable that is zip tied up behind your power supply. For gaming I'd recommend getting EVGA brand, and the card slot can give 52 watts up to the card, plus the cable above can give 75, for 127 watts max. We have used an EVGA which has no supplemental power feed off that top video slot, and two added ones that need the cable. My son is happy with the results.... I stick with Quadro cards for my work.
6. You cannot run that second processor, ever, in a xw6400. That is for a xw6600. SLBBM is the latest sSpec code for that, and I have never found a xw6600 that cannot run that fastest quad core HP certifies for the xw6600. Look up "microcode" to see a bit more about the fact that even if a certain processor "should" be able to work in a particular HP workstation it almost certainly will not if it is not listed in the QuickSpec. There are very very rare exceptions.
7. When HP stops supporting a workstation the universal installers for similar hardware from the same vendor used in later workstations can often be used on the older workstation. The later installer includes drivers for the earlier hardware, often. So I look to the Z600 and Z620 for recent HP installers that will work in my xw6400/xw6600 builds.