Go look at the benchmarks if you want to see the differences.
The turbo modes are more aggressive, sure. But the 860 i7 is the same price as the i7 920. I wouldn't even consider an i5 unless I was going really budget (which the i5 IS the budget chip).
I think this update is both nice, but disappointing. Every system should have lynnfield. The 21.5 inch model should have the i5's, and the 27's (and 24's! what the heck happened??) should have i7's. They should ALL have better graphics. Easily accessible hard drives. Seriously, why is there no 24 inch model? You either get a small or giant screen?
I've been using Windows 7 and Snow Leopard for awhile side by side...at this point I think Windows 7, while not as nice looking, is far more functional AND fast. At least it feels faster. Plus you can just do so much more with the Windows platform, and I have yet to experience a single problem with it. My snow leopard installs are all pretty crappy feeling. A lot of beach balling, program crashes (mostly apple's own software!) and there is so much I just CAN'T do nearly as well as on windows.
The only thing these iMac's offer is a nice design. They are still impossible to really do any upgrades too outside of memory, and they are hugely expensive for what you get. The i5, i7 stuff they are using is not expensive. I can build a PC that absolutely kills their top of the line model for a thousand bucks. And I am not forced to get a monitor that becomes disposable. I already run dual IPS monitors, why would I want to have another foisted on me? And one that acts as a mirror?
Again....lack of choice (and at this point a pretty crappy OS). It's just fairly insulting how Apple treats their customers and I'm about to leave them as one. Apple needs a real desktop.