updated 02:30 pm EDT, Thu October 15, 2009
Rumor has iMac using quad-core Nehalem
A tentative rumor ad mid-day suggests that Apple's anticipated iMac redesign may draw on Intel's mobile Core i7 processors. Most other details aren't provided in the AppleInsider tip, but any release before early 2010 would require that Apple use some or all of the quad-core "Clarksfield" designs on the market and produce the first non-workstation quad-core Macs.
The 1.6GHz and 1.73GHz Core i7 models are the most likely as they have bulk prices at ranges roughly level with the higher-end Core 2 Duo chips used in iMacs today. A 2GHz Core i7 Extreme exists but usually costs about $1,000 per part in large batches, ruling it out as anything more than a build-to-order option at most.
Whether or not they would be used at all has been a point of contention as they would require a significantly different architecture. NVIDIA is currently banned from supporting Core i7 with its integrated graphics chipsets due to a license dispute and would force Apple to either use Intel's integrated graphics or else switch to dedicated graphics.
It would similarly require a different approach to marketing Apple's computers. Although in most cases much faster than existing Core 2 Duo and Core 2 Quad systems, their low clock speeds in full quad-core use would likely push Apple to advertise their maximum clock speeds under Turbo Boost instead. The 1.73GHz chip runs at up to 3.06GHz when one or more cores aren't needed and may see Apple advertise the higher speed instead.
A release had been predicted for sometime this month but hasn't been narrowed down to any specific date.