As I understand it, xargs only runs on the local machine; GNU parallel can run on remote machines as well. So parallel is the cluster-friendly version of xargs's -P.
Probably, although it doesn't seem to be the focus of xargs.
And the version of xargs that is included with Solaris 10 doesn't have the -P option. In which case, installing gnu parallel is a slightly easier option than installing a different version of xargs.