This year, I was upgrading from the 2010 Air (2.13Ghz model) to the newer Air (1.8Ghz model) and was concerned that the Ghz mattered here. It appears that the new processor makes a huge difference, since the benchmarks I ran out of curiosity (GeekBench) indicate a 2x improvement, and the actual use ( say, compiling a huge project in Xcode) is significantly faster.
Some other benchmarks I read before making my purchase: http://www.anandtech.com/show/4528/the-2011-macbook-air-11-1... ("Both the 11 and 13-inch MacBook Air are fast enough to replace your 3 year old MacBook Pro and still deliver better performance. You can even move from a 2010 MacBook Pro to an upgraded MacBook Air and not notice any drop in performance. All of this is thanks to Intel's Sandy Bridge CPU.")
(I have the highest spec 13" model, with the i7 processor.)