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Isn't the Core 2 Duo rather old? Why did they use that instead of a more recent i3/i5/i7?

It comes down to graphics performance. If they used an i3, they would need to use intel's integrated graphics, which are much slower than the geforce 320m. Going with the Core2 allows them to use Nvidia's chipset, which has a much faster integrated graphics chip.

Why not a i5 or i7 then?

E.g. the MacBook Pro 15" (i5) comes with a Nvidia GeForce GT 330M.

Does the i5/i7 and related chipset dependencies take up more space maybe? They seem overall more performant and better battery savers than the Core 2 Duo.

Yeah; Intel locked NVidia out of the chipset market with Nehalem, so in order to use an NVidia GPU you need to have an extra die on the motherboard, you can't fold it into the chipset.

There's no room in the Air chassis for that, so to stay off Intel Integrated graphics, they have to stay on Core 2 Duo.

…and they can't include both the integrated graphics and Nvidia, because of space constraints.

See http://arstechnica.com/apple/news/2010/05/new-intel-ulv-proc...

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