After thinking about it I went with the 1.6, as I couldn't see the benefit of spending the $300 for what would be, at most, a 3% to 4% real world speed bump.
I used the $300 to buy a superdrive (very glad I did...don't need it much, but when you do, you'll be happy you have it), a copy of Fusion, and an OEM copy of XP Pro SP2c.
I've had it close to a month now and I love this laptop...to paraphrase Comic Book Guy..."BEST....LAPTOP...EVER"....
And let me say to anyone who will start in about how the MBA doesn't have this or that....I know...if I wanted Firewire, dedicated graphics, etc, etc, I would've bought a MBP...
Can you tell I'm happy with the MBA? Take it easy...