Dear Sandy, 27" iMac i5 2.66 GHz = USD 1999, 27" iMac 3.06 GHz Core2 Duo = USD 1699. The i5 has the ATI 4850, the Core2 Duo has the ATI 4670, and upgrade to ATI 4850 costs USD 150. Therefore, 1699 + 150 = 1849, that means it's effectively only USD 50 cheaper than the i5, when you equilize all except the CPUs... I would personally go for the i5 - for just USD 50 difference. The i5 will TurboBoost up to 3.2 GHz (> 3.06 GHz!) whenever you need the extra power...
Regards,
Loris.