Core i7 is the leader in high end processor market. Core i5 is Intel's new mid range processor.
Main Difference:

Turbo Mode
Core i7 can over clock itself when some cores are not being used (up to 300 MHz boost).

DDR3 Memory
Core i7 requires RAM in set of three.
Core i5 requires RAM in set of two.

Hyper Threading
Core i7 has 4 cores but can simulate to 8.