Yeah they can
But I'm not sure if ATi's Linux drivers (if you're going to be using Linux) are at an okay standard.
Taking a look at the Cinebench scores of i7 against the Core 2 it's not beating it massively.
Just price an i7 setup (one to be used in the render farm) and another Core 2 one and see the % difference in price and % difference in scores and see which one gives best performance for price. Could do the same with PII one as well.