For regular computer stuff, my 2nd-gen Macbook Air works like a dream, and in day-to-day use it's the SSD that makes it so much faster than my work computer with a normal HD.

In the SSD era, if you don't use videogames or do video rendering, I don't think processor speed matters that much anymore. (Cue mobs with torches...)

The pragmatist in me realizes I don't need a core i7 to edit text files and run unicorn_rails in the background...but the geek in me punched the pragmatist in the face and said "yes you do".

I watch Netflix streaming on an attached monitor and surf web on main screen using base level 2nd gen MBA. It gets a bit slow.

I have a 13" MBA of the previous (Core2) generation - very happy with it. I bike commute so the small size & weight were important, and the OSX development environment for Ruby is fairly well evolved. Jeff Atwood has already flogged the benefits of SSD, and I'm a big fan as well - but whatever size suits your data makes sense, I wouldn't over-buy just for the i7 option. The difference between i5 and i7 usually only shows up in very specific workloads that take advantage of the i7's hyperthreading or clock bump. For general development work you won't see a difference, although both i5 and i7 are substantially faster than the Core2.

The i7 is going to use less power for a given workload because it will be asleep more.

Is this true? For the same workload, would the i7 processor shorten or lengthen battery life?

If it's the same or better, $100 for the \i7 upgrade seems like a no-brainer. Or am I missing something?

You're missing that it's $400, not $100, which made it hard to decide.

here's how I justified it. Say you use your new air for 2-3 years. Say you spend around 20% of your days using it. That is about 5000 hours. Say you get 10% speedup using 1.8ghz i7 vs 1.7ghz i5. That saves you about 500 hours of time. 500$ more for 500 hours time back. ;)

I don't think you were being totally serious, but I don't think this justification works (even assuming you got all the hour numbers right) because for the vast majority of the tasks you're going to be doing on the machine (e.g., web browsing, coding, etc.), the speed differential between the i7 and i5 will save you 0 time.

Exactly. I think the grandparent is missing that only in very special circumstances does the i7 make a difference, probably less than 1% of your time.

Lets assume its 10%. 3 years * 52 weeks *40 hours per week= 6,240 hours working.

Lets assume that for 10% of that day you're using your computer in a way that the i7 is able to make faster. Assuming you get 10% speedup, that saves you 62.4 hours, the equivalent of paying yourself $8.01/hr.

But frankly, assuming your computer spends 10% of your workday performing i7 optimized tasks seems high. 1% is more likely (if not still unreasonable). And at that rate, you're paying yourself $80.13 per hour.

And keep in mind that you are paying yourself to sit there for an extra couple microseconds between computer operations.

Not that you shouldn't get the i7. Just don't dream that its somehow paying for itself!