In short, if you’re buying an 11-inch MacBook Air the increase in performance over the 1.6GHz i5 is noticeable; if you’re buying a 13-inch Air that comes stock with the 1.7GHz i5 then the improvement is more subtle.
Alas, no mention of battery life comparisons. Hopefully future in-depth tests will compare the battery life of the i5 MacBook Air against the i7.