The Intel Core i5 661 is the first CPU we've seen of a new series based on the new Intel Clarkdale design and for want of a better description it lies somewhere towards the top end of the bottom half of Intel's current CPU line-up. In other words, it's kind of 'mid-range'.
This dual-core CPU is built on Intel's new 32nm manufacturing process and incorporates a graphics chip on the package, though not on the same die (the graphics uses a 45nm process). Collectively these new chips will be available under the Core i5 6xx and Core i3 5xx numbering schemes.
The key difference between these two ranges is that the 600s have Turbo Boost while the 500s do not. Turbo Boost is the ability of the CPU to automatically overclock one or more of its cores dependent on workload. When enabled, the CPU will constantly try and work at its maximum speed which, if all cores are under load, will likely be its reference speed. However, if only some of the cores are under load, the unused ones are clocked back and the extra thermal headroom is used to overclock the remaining cores resulting in better performance.
Clarkdale also takes advantage of Simultaneous Multi-Threading (SMT), which is the ability for each core of the CPU to run two threads at the same time thus speeding up multi-threaded operations or multitasking. Essentially, the CPU appears to the operating system like it has twice as many cores as it does but in the background it's merely optimising the order in which it executes code so you end up with a performance improvement. However, the improvement doesn't rival that of two physical cores.
With regards the rest of Intel's range, the Clarkdale CPUs can be thought of as replacing the Core 2 series as the entry level of Intel's line-up, though Core 2 and various Pentium branded chips are likely to be available in shops for some time to come. This will leave the Lynnfield range (Core i7 8xx and Core i5 7xx) as the mid- to high-end and the Bloomfield (Core i7 9xx) series at the top. All these CPUs are based on Intel's current overarching microarchitecture, Nehalem. In case you were wondering, yes, this is all rather confusing so rather than list the myriad subtle differences between all these ranges, we've put them in a table, where we hope everything will become clear.
The key things to note are that Bloomfield CPUs require a different socket (LGA1366) and motherboard chipset to the rest of the range and as such are out on there own at the high-end where it costs £350+ just for the CPU and motherboard. The rest of the range fits in the LGA1156 socket so the Core i5 661 and other Clarkdale chips should work with existing P55 chipset based motherboards, though a firmware update might be needed. As such you could easily buy a Core i3 530 (£90), say, then upgrade to a Core i7 860 (£231) further down the line.