As expected, Apple has rolled out an iMac update that brings Intel's Sandy Bridge CPUs to the all-in-one desktop line. Quad-core processors have been deployed across the board, starting with a 2.5GHz Core i5 in the base 21.5" system. Apple doesn't list model numbers for the CPUs, but you can upgrade the 21.5" to a faster Core i5 or a Core i7. Similar upgrade options are available for the 27" iMac, which starts with a 2.7GHz Core i5.
Sandy Bridge has surprisingly competent integrated graphics, but Apple has instead gone the discrete route with a collection of Radeon GPUs. The Radeon HD 6750M and 6770M are the only options available with the 21.5" iMac, while the larger model can be configured with a potent Radeon HD 6970M with either 1GB or 2GB of memory. Serious Mac gamers (all three of them) would do well to consider the 2GB upgrade given the 27-incher's 2560x1440 display resolution. The Radeon HD 6700 series should be adequate for everyone else, especially given the fact that the 21.5" model's display maxes out at 1080p.
In addition to CPU and GPU upgrades, Apple has added Thunderbold connectivity to the new iMacs. There are dual Thunderbolt ports at the rear of the 27-incher and just one tucked behind the 21.5" model. Forgive my lack of enthusiasm. Thunderbolt peripherals are still rare in the wild, while USB 3.0 storage devices are relatively cheap, readily available, and certainly not bottlenecked by the latest USB interface. The new iMacs eschew SuperSpeed USB connectivity completely, and they only have four old-school USB ports. Apple has, however, added a 720p webcam for hi-def FaceTime calls and Chatroulette sessions.
Rumors of a cheaper iMac with a new panel size failed to bear fruit in this update. The base iMac still starts at $1,199, and you'll have to pony up $1,699 to get into 27" territory.