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The i7 is going to use less power for a given workload because it will be asleep more.

Is this true? For the same workload, would the i7 processor shorten or lengthen battery life?

If it's the same or better, $100 for the \i7 upgrade seems like a no-brainer. Or am I missing something?

You're missing that it's $400, not $100, which made it hard to decide.