Phenom or i7

For price, the Phenom ii dominates the competition. With the performance of the Phenom ii being able to reach 6Ghz its fine. The i7 is still extremely pricy, so considering your saving a good $600 the Phenom ii would be my first choice. A recent review said that the Phenom actually out performed the lower i7.
 
I would suggest you not touch the Windows 7 operating system until they release Service Pack 1 for it. All Microsoft's operating systems have a lot of bugs in them when they are first released.

Also choose a Phenom II that is 95 Watt processor or an Intel Core 2 Quad that is 95 Watt. All the i7 processors are 130 Watt and above in power consumption.
 
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