"It has two duel core 3.2 (?) xeon processors" No, it has two 3.2GHz 32-bit Xeon processors that "may" support hyper-threading (which would appear as a total of 4 processors in Task Manager).  This system is too old to support actual dual-core processors. Know that Windows 7 is not supported on the 2600, which simply means that Dell does not have drivers for it.  You can probably use the 2008x86 drivers for any devices that go unknown.  If you have an ERA card installed, there will not be an acceptable driver for it, as it is installed with the management software, OMSA (OpenManage Server Administrator), which will only install on a supported (Server) OS. Unsupported doesn't mean it won't work, so it may do just fine.  The video performance will be pretty poor, so if you only need the server to crunch numbers, then it should be ok, but if it must supply video processing too, it may not work.  The onboard video chip probably has 16MB of video memory, and most add-in graphics cards will not work. 2003 is fully supported on the machine, but hard to say if your game will run on it ... but there is little a client OS can do that a server OS cannot. FYI ... the 2600 is also limited to 32-bit OS's.
I have a dell powerdege 2600, I would like to install windows 7 on it (not for desktop use) i was planning on turning it into a server for a game running on windows 7.  It has two duel core 3.2 (?) xeon processors in it, along with 4 gigs of ram. If i can not install windows 7, would Microsoft server 2003 (what was originally installed on it) be able to run as a game server? All advice would be most appreciated! 
can a dell poweredge 2600 run windows 7?