I don't think the best iMac is as good as the Pro and its power potential through upgrades or higher speccing when buying is way off that of the Pro, just that the pwoer boost ofthe Quad iMac over the quad and the good value price of the 27" monitor is enough for most people. I have a 27" Dell monitor and its gorgeous, but its only 1920x1200. If it does hurt sales of the Pro, I doubt it matters as no doubt the profit margin on the iMac is way higher than the Pro.

The new iMacs are not a replacement for Mac Pros. The Mac Pros are so much more upgradeable, with multi screen options. There might be a tiny overlap at the very bottom of the Mac Pro price range. Though the iMac will probably cover the vast numbers of those wanting a desktop.

The new imac does look good but probably doesn't support HT (can't tell until I pop to the apple shop for a play), the mac pro will.
Still far too expensive for me though.

To be honest the main benefit of the 27 is the screen, I doubt most users, and that probably exceeds 90% need more than a Core 2. Although looking at the Mac forums today I noticed lots of people are getting excited at high res gaming on the 27. Although the 4850 mobility is a very good mobility solution, its an epic fail (as the kids say) for attempting to play reasonable games at that res, which I'd expect people won't be expecting to have to scale down the res.

Kudos to Apple, there isn't much better than the 4850M at the moment to actually stick in the damn thing, so their alternative is none existent. From what I read the Nvidia mobile stuff like the 260M isn't quite as good, dunno if that is right or not...

I agree. I am considering getting two 4 core versions because I do not expect to replace them for a number of years and by doing so it will give me a longer time before replacement. The screen is the big plus for me as well.

There are a lot of questions being asked about the panel in the iMacs... The 27" IPS panel with LED backlight would cost at least $1500 standalone, Apples 30" version costs $1800 and is lower spec(!), according to some analysts, so the bottom range machine looks like it could be a "loss leader"...

Given the i7 version will have 4 cores + HT, it will take a lot of low-end work away from Mac Pros. Alex Lindsay (Pixel Corp) is looking at getting iMac 27" for his staff, instead of Mac Pros, because the iMacs are capable of doing the design side of the animation and editing, but the 24" display meant that you couldn't get the border and tools around the display for editing HD frames, the 27" is perfect and cheaper than their current "standard" machine of a Mac Pro + 30" monitor. They had been looking at 24" iMacs + 30" secondary displays, but the dual core didn't quite have the horsepower, but the quad core i7 + 27" display seem to be the tipping point.