Xabi Alonso > Khedira.
Think Khedira's value might have inflated thanks to a successful World Cup and the bizarre opinion that a ton of extra height makes you a better defensive midfielder
Xabi Alonso was a great player. He's still pretty impressive, but at 32, he doesn't have much left in the tank. He's also on a big wage packet. It will be interesting to see how he performs at Bayern. With Martinez injured, Bayern saw a need that could be filled with an exceptionally heady veteran who has won many titles everywhere. At this point, I would much rather have Khedira, 200K a week or not...
And yes, as many have pointed out, Khedira is a box-to-box. But I think that given the massive physical black hole in the middle of Arsenal's midfield, he would be most helpful. If he can avoid injuries, I'd take him over Ramsay (or Wilshere) any day. They are nice young players, but really really inconsistent.
Alex Song was a bust at Barca (gee, surprise!), but he had been playing quite well for Arsenal before he left. He's available, I believe, for peanuts.