Hi will19984713,
You've not been bamboozlded at all, the I5 680 is the latest Intel cpu generation, and costs actually more money than an older i7@2.8ghz.
It is actually a 2 core CPU, but it has hypertreading capacities.
It's an excellent CPU, and will probably performs (much?) better than an i7@2.8ghz....
All the i5 cpu don't have the same architecture,
some are dual cores, some are quad cores,
some have hyperthreadring, some don't...
Here's a brief description of the i5s : http://en.wikipedia.org/wiki/Intel_Core_i5
That's an excellent choice anyway !