Well I'd like to start by thanking you for taking some of your time to reply. It's trully appreciated.

So:

First and if possible, I would like to have a brief explanation about the difference between Xeon CPUs and the Core i3/i5/i7 and i7-Extreme CPUs. I heard some gamers using those but didn't understand why, taking in mind the i7-K series.

Second, I won't put a budget cuz I want to hear different opinions and options, keeping in mind I'll stay faithfull to an Intel CPU and an Asus motherboard.
My last computer lasted almost 9 years and if I am to spend more cash on this new one, I hope it lasts just as long.

Third, I'm going to use it for art programs (example: Photoshops, Corel, Flash and stuff of that nature) and gaming
but nothing into the enthusiastic high end level, to the point of tweaking motherboards and GPUs.