Intel released a curious new CPU a few weeks ago. It's a Xeon, a chip class usually reserved for high-powered workstations (including the Mac Pro) and servers, yet this chip is quite different than the usual Xeons. Dubbed L3426, it is a relatively inexpensive 64-bit low-clocked (1.86 GHz) quad-core Lynnfield CPU, with a TDP of only 45 Watts, which makes it very interesting for consumer Mac fans.
The reasonably low TDP makes a quad-core Xeon iMac a distinct possibility for the next iMac release. This would seem to support previous Xeon iMac rumours. While 1.86 GHz seems slow, this chip class is actually very, very fast on a per-clock basis, and furthermore, it can rev the clock speed up to 3.2 GHz using Intel's Turbo Boost technology when its multiple cores are not being efficiently utilized. In addition, the Xeon L3426 supports Hyper-Threading, like all the Xeon 3000 series processors. This further differentiates it from Intel's consumer class Core i5 CPUs, which do not support HT.
Alternatively, if Apple wants to put quad-core into the iMac, it can use Intel's Clarksfield Core i7 Mobile class of processors. These chips have the same 45 Watt TDP and are quite similar to Xeon L3426, but are somewhat slower clocked, yet still remain very, very fast. In fact, it is possible that Apple will use Core i7 for low-end (1.60/2.80 GHz) and mid-end (1.73/3.06 GHz) iMacs, and Xeon L3426 for the top-of-the-line (1.86/3.20 GHz) iMac model, although ironically the reported Xeon L3426 pricing is cheaper than the Core i7 Mobile chips. Whether or not it is truly cheaper, the take home message is that Xeon L3426 isn't prohibitively expensive for consumer Macs.
There is also Core i7 Mobile Extreme which is faster clocked than Xeon L3426, but that chip has a higher TDP, which makes it less attractive for use in near-silent all-in-one iMacs.