I have a mid-2011 13" MacBook Air that I always thought was a dual-core machine (it's a 1.7 GHZ Core i5). In fact, Apple's "Tech Specs" page lists it as a dual-core CPU with 3 MB shared L3 cache.

But Activity Monitor seems to think it's a quad-core part. The "CPU" tab shows four cores, as does the CPU usage window. What gives?

My dual-quad Mac Pro shows as a 16-core machine in Activity Monitor, but that machine has Xeon processors with Hyperthreading enabled. But I don't think Core i5s have Hyperthreading, or if they do, I don't think it's turned on in MacBook Pros.

Anyone have any ideas as to what's going on here?

The Core i5 does, indeed, support Hyperthreading, which probably explains the number of cores you're seeing in Activity Monitor.

Interesting. My iMac at work has a Core i5 quad-core, but it only shows the four processors in Activity monitor. Maybe Hyperthreading is turned off in the iMacs?

Strange and interesting -- both computers use mobile variants of the i5 -- perhaps you're correct.

Are both the iMac and the Air running the same version of OS X?

Yep, they're both running 10.7.4. The MBA is a year newer than the iMac, though; they might have slightly different varieties of the Core i5 (plus they're obviously running at different clock rates).