In theory, you can. All CPUs for LGA 1156 socket should work. However, I haven't heard anyone doing it so you would be the guinea pig to test things out. It will certainly void your warranty though
A quad core i5 or i7 should work. They use the same socket and I'm pretty sure all 27" iMacs have the same EFI so they support the same steppings. There is nothing pointing toward it not working. All you got to do is try. If the quad core doesn't work, sell it. You may lose 20 bucks or so but that shouldn't be a big deal.
A quad core would be noticeably faster in tasks that require lots of CPU power. Maybe even up to twice as fast.
I heard from a frined that 27" models that came with i3 would only support i5 because of the motherboard. Is that true?
Good find but in the first few paragraphs I noticed 'This should give it a lot more power and bring it to the level of the 2010 model'. I don't think anyone has yet attempted/documented moving from the 2.80 i5 to an i7 with the present 2010 model?It has been done actually. I read posts from ifixt and hardmac of people going from i3 to i7 quad. The hardest part is tearing down the imac to access the cpu socket. Here's a link to a step by step guide: http://www.hardmac.com/articles/335/page2
Hmm Yeah I actually did not read the guide throughly. It was replacing the 2009 model's CPU. I wonder if the innards are similar to the new imac refereshed in june 2010? Perhaps compare the teardown pics of 2010 model to it?