The question I pose to those into CPUs is: Do I get an i5 @ 2.66GHz Dual Core or an i7 @ 1.6GHz Quad Core.
My current desktop is a Wolfdale E6300 Dual Core @ 2.8GHz and I was looking for something that could out-perform it.
well, it depends what you do, if you have programs that are heavily threaded the i7-720 will win out, and if they aren't it will be pretty close thanks to turbo boost (the i7 hits 2.8 in single threaded and 2.4 in dual threaded tasks)
So if I am running more modern applications with multi-threading capabilities (such as Starcraft 2 or Call of Duty: Black Ops), the i7 will win out.
But If I was to run older games with a lower threading capability, it will not be able to utilize all the cores so it would be better to get the i5?
Correct. If you use programs/games that are single thread oriented, you'll get the most performance out of the higher clocked CPU. However, if you use other programs that include graphics editing and such, not to mention modern games, it would be a safe bet to go with the quad core.