I love my Air... I was hesitant at first because of HDD size only b/c I wasn't sure how much space would be left over after system and necessary apps were installed. In the end, there was enough left over to suit my needs. The Air's processor speed doesn't seem to be a problem given that it's coupled with OS X and excellent software. Also, I've never had any fan/heat issues.
All that being said, if I was buying new today, I would still go for the Air. The only concern that I had before (being HDD space) has been addressed and combined with a new GPU to boot, it would make a great purchase.
P.S. I love the keyboard backlight and use it always at night. That alone would make me re-think the lower-end Macbook.