Wait for MBA 2012. Then there is no contest.

You already know the differences is in the area of processing speed. So I think if you need a valid opinion you will need to let us know your usual daily tasks and expectation from the Macbook Air. Then only we can advise you. 

Document editing and presentation I think the MBA 2010 is more than enough. 

2011 model has backlit keyboard

If you can wait for another few months, I believe there is a major change on their MBP and MBA including the design. Spare a bit of extra cash to get the latest laptop rather than old laptop.

Macbook Pro will launch first followed by Macbook Air in Q3. By the time Macbook Air launched all the world will be ready for a new refreshed Macbook Pro due in 2013.

The waiting game 

Got Retina Display on all upcoming MBP and MBA. 
Since you got MBP means you're not in a hurry to change also.

So I suggest you wait, perhaps the new MBP may suit you. It's not long away, one more month to go only. 

I finished Diablo III on my MBA Late 2010.
Powerful enough for you?

No problem. I myself was contemplating to get it but I tried the game on a Intel HD3000 and the game ran just fine. I could even play Dota 2 on the HD3000. Did my research and the GT320m is on par with the HD3000. The i5 proc of course will definitely have an edge over c2d but i can tell you game nowadays run just fine with C2D processors.

My only concern gaming on the MBA was overheating but i played an 8 hours Diablo 3 marathon with no problems at all. Heat was bearable, no noisy fan sounds and game doesnt lag even when the machine gets hot.

Well long story short my advice is: If you can afford it, I suggest you get the i5 one. If you prefer to save and is on a tight budget (like I was), get the late 2010 model. It kicks just as much ass .

Small note: Slight lags when playing multiplayer so bear in mind. Still very playable.

Nop not really. Like I said the HD3000 is only on par with the GT320 but the i5 of course will definitely be faster than C2D so you should get performance improvements on the i5 compared to c2d. My answer to your question would be nop it only improves slightly from the late 2010 model. In terms of heat dissipation its the same thing because the chassis is basically the exact same (except for the new backlit keyboard. Not sure if that will contribute to heat).

After all thats said and done the MBA was never meant for such heavy tasks. Its capable but not meant for it .

---

Added on May 21, 2012, 10:02 amBy the way, you are currently using a late 2010 macbook pro right? Arent the specs exactly the same as the Macbook Air except your Macbook Pro has a faster c2d processor and is still running sata hdd? If ur happy with ur current mbp performance and want something lighter then by all means get the mba late 2010. If youre looking for slight performance improvements then the 2011 model will suit you better.