I'm leaning toward the base model i5, here's my thinking...
Take a look at these results from Macworld:
http://www.macworld.com/article/159862/2011/05/bto2011imacs.html
Sure, when importing a camera archive with iMovie, the i7 is "15 percent faster than the standard 21.5-inch 2.7GHz Core i5". That sounds impressive, but the difference is only 11 seconds; 60 verses 71 seconds. For that amount of money I can wait 11 seconds (or maybe 14 seconds since I'm looking at the 2.5 GHz i5).
Second point: The base model iMac is $500 less than the cheapest i7 (an additional $300 gets you the 2.7 GHz i5, another $200 on top of that gets you the i7). If you save $500, you're almost half way to buying a new computer. In five years, take that $500 and put it toward a new iMac.
Around 5 years ago (think Power PC era), my thinking was "get the fastest machine you could afford". These days the base models are so fast, I think people rarely need more, at least for home use.