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Upgrading for Mac Pro 3.1 to 5.1 (or 6.1)?

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I have an Early 2008 Mac Pro 3.1 (2x2.8 Ghz Quad-Core Intel Xeon - 16GB RAM) and looking to upgrade to a more current model.

Two questions:

(1):
I currently have (4) 1-TB internal Drives - one with boot OS (Lion 10.8.3 installed). If I buy a newer Mac Pro Desktop, can I just swap the drives out and go, or do I have to install the OS all over again to recognize the new hardware?

(2):
Any recommendations on a "smart" buy to replace what I currently have that would significantly increase performance? Cost is somewhat of a factor (especially looking at the new 12 cores!!!). Is a single 3.33 GHZ 6-Core any faster than what I have now?

Thanks!

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