Xeon is where the profit is, a nice compromise between volume, R+D spend (AMD did all the chip groundwork for them, Compaq/HP the systems-level stuff), and decent margin.

Itanium is where the bottomless money-pit is. No volume, huge unshared R+D spend on chips, and margin that only looks good in HP's imagination. Itanium may or may not be even more invisible in the market than SPARC or PowerPC, but sooner or later its drain on Intel's finances will become visible on Intel's bottom line (why invest tens of millions in Itanium when there's a bigger RoI if it goes to Xeon), and so inevitably the Itanium price will go up. HP will have to pick up the price increase, and long-time observers already know where that leads...