Yes, a 3,1 does take FB-DIMMs, and can operate at up to 800MHz, but they're readily available on Ebay, and if you don't need more than 16GB of RAM, they're really not as expensive as they're cracked up to be. An 8x2GB @ 667MHz config costs about $50 from the right seller. It's when you start looking at 4GB FB-DIMMs that the price skyrockets.
The 3.2GHz Xeon is an E5482. Of course, you'd need a matched pair to run two of them (you can't have one at 2.8GHz and one at 3.2GHz.) If you've got a quad model, it has one 2.8GHz E5462 Xeon Processor in the top socket, and a spacer over top of the second socket. And yes, all you need to put another processor in the slot is a heatsink and a matched processor.
The performance gains you'd get by bumping the processors from 2.8GHz to 3.2GHz and by using 800MHz RAM over 667MHz RAM are minimal, and certainly not worth the premium in price they often command. Assuming you have a Quad Core 3,1 model, the most economical upgrade is the grab another 2.8GHz E5462 Xeon and a heatsink and 16GB of DDR2 667MHz FB-DIMMs in the 8x2GB config I mentioned. That's actually exactly what I did when I had my 3,1.