What can I do to increase the performance of my Mac Pro?
You have few options:


CPU: Now you have two two-cores XEONs. You may upgrade them to two 4-cores XEONs. Here is a crowd-sourced experience on this. AFAIK the best you can add is X5355 or even X5365. Here is a good discussion on this matter. And these are pictures.
SSD: Just put in the place reserved for second ODD(Can't remember if your model have wires in place already). Or buy 3.5" adapter like IcyDock 2.5" to 3.5" SSD &amp; SATA Hard Drive Converter or OWC's MountPro. Yes, it is much faster for boot drive than conventional HDD, RAIDed or not.
GPU: look at this blog and forums there if you are interested in flashing cheap PC card for your Mac.
Memory: You may add as much as much as 32Gb with 240-pin PC2-5300 (667MHz) DDR2 ECC fully-buffered DIMM (FB-DIMM) (matched pairs) 4GB modules. If you need them.


Right now I would choose SSD. And then I would check if prices for those CPU are stable or keep falling and then decide on time and need for CPU upgrade.