Hi there,
The actual difference between sandy bridge i7 and i5 chips is Hyperthreading (enabled on i7, disabled on i5), 2MB more L3 cache on i7 and higher default clockspeed on i7.
As you can imagine, the stock clockspeed difference on these unlocked chips is pretty meaningless if you are willing to overclock.
As for overclocking it is very much a coin toss as to how high you will be able to get your individual CPU - though it does seem that the i7 chips (especially the newer manufactured i7 2700K ) have a higher chance of hitting slightly higher clockspeeds with realistic voltage. That said, in terms of % clockspeed the difference between them likely won't be much.
As for hyperthreading, this technology effectively creates two virtual cores for each physical core. Theoretically this can provide up to 25% performance boost over non-hyperthreaded CPUs (like an i5) when at the same clockspeed. However, in real-world use this rarely goes over 15% and only in highly threaded applications like video and image editing. If you are mainly gaming then hyperthreading currently doesn't seem to be of much benefit (due to the relatively lightly threaded nature of modern games).
Finally, as for the extra 2MB of L3 cache - i'm honestly not sure how much this affects performance - but from the benchmarks I have seen of i7 CPUs with hyperthreading off (so the cache is the only difference between the i7 and i5) the extra cache doesn't seem to make much difference in most applications.
Take-home message:
If you plan to use highly-threaded applications and 10-20% extra performance is worth ~£75 to you, then get an i7.
If this extra performance in highly threaded apps isn't worth ~£75 to you and/or you mainly only use lightly threaded applications (like games), then go for the i5.