Relative performance of 2006 Mac Pro and 2007 iMac
Your question is somewhat difficult to answer, because not all is based upon “raw” performance.

I’d say that it would be better if you consider the following differences:

RAM


MP(MacPro): Very easy to add and the limit is probably higher than what you can/Want to afford for the task you want to perform. Adding 8-12GB is probably “cheap”.
iM(iMac): Probably more limited, tho not harder to change as far as I can remember, but if you need 12 GB you can’t achieve that with that (or any AFAICR) iMac.


HARD DRIVES


MP: Although “external” drives are “ok”, having four internal SATA bays is godsend. Very easy to add/remove drives and to create a simple RAID1 if you wanna have a mirror “just in case”. 
iM: close to impossible (unless you have the right tools, time, patience and dedication) to change the internal drive, which is a “slower” 2.5 drive if I am not mistaken. Some “hacks” exist to replace the superdrive with another drive, but I don’t know if that Model fits. 


Video


MP: Tho I don’t know if the NVIDA is better than that particular ATI (tho I believe it is), the expandability of the MP is superior to the zero expandability of the iMac. You could add more cards to your MacPro for more than two displays if that’s what you want. But you have to get your own displays…
iM: Zero. You can’t change or add another video card. You’re stuck with a very nice 24 inch display and an integrated iSight. The MacPro, will need displays (and webcams). The CONS here is that if you don’t like Glossy Displays… you’re out of luck :)


RAM Speed, Bus Speed, etc

All these things don’t really change your day to day workflow, yes, some Front Side Buses are faster than others, but in the end, the difference is probably not a decision factor. (given similar specs of course).

Connectivity


Both machines have enough USB/FW ports I believe, tho the Mac Pro surely has some more, you will need more ports in the iMac if you use external drives (not that you have much choice there). 


So which one do I chose?

The answer is, there’s no answer. You have to evaluate your priorities. I wouldn’t change my Mac Pro (early 2008) for a new iMac, because I already have two 27’’ screens, already have 4 drives in there (with some RAID going on) + an SSD for the OS and I have replaced the stock video card (NVIDIA) with an ATI (because my nVidia Failed and the ATI costed the same as the out of warranty nVIdia). My Mac Pro is going to turn 3 years soon and it works fantastically.

The iMac on the other hand, is a beautiful looking machine that if you use paired with a lot of BlueTooth stuff, makes your desk look very pristine. Sadly, I need storage, redundancy and multi-core for some of the things I do for a living, so the 8 cores of my Mac Pro are needed in my case. 

I notice that the MultiCore is godsend sometimes, you see processes hanging there at 100% and the rest of the CPUs and cores take care. But of course, a normal World of Warcraft user wouldn’t even use 5% of all that. 

I suggest you visit Anandtech’s Mac section if you want some benchmarks and reviews. It’s usually filled with good impressions and comments and sometimes comparisons. I don’t know if you’ll find an exact comparison between those two models, but you might come up with something similar. 

My Personal Opinion

Get the Mac Pro if you’re going to develop and already have screens (or the budget to buy them), because in the future, when you want your time machine, your drive cloned, more space, etc., the Mac Pro is going to be much more helpful than stacking fragile external Firewire/USB drives. 

UPDATE ON VIDEO

According to the experts (tegeril), the “ATI 2600 Pro is a substantially superior card to the Nvidia 7300GT”. You’ll have to find some benchmarking for that and of course evaluate if you’re going to need the extra power or the expandability is better.