Why can't I install Final Cut Studio2 on my MacPro

I have a MacPro Dual Core Xeon 2.66 w/8GB of ram running OS X Lion 10.7.5, I had read that I couldn't use a newer version of Final Cut so got an older one and cannot install it due to PowerPC issues?  Do I need to dual boot and install an older OSX?

I sounds like you version was written for a Power PC processor. For up to and including Snow leopard, Apple included Rosetta in the operating system to allow Power PC apps to run on a Mac with an Intel processor.
You can dual boot to Snow Leopard

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