I would go with all g5 desktops. You will have room for audio cards and be more future proof. the xserve is intended to fit in a small space and use less power but they are loud and need a server closet, also limited expansion. At night you can just add the desktop g5s to the render farm for DVD studio, shake, after effects, maya, lightwave others.
Read this thread if you have questions.
http://www.creativecow.net/forum/read_thread_content.php?postid=&highlight=...
Adam