About to start a stills-heavy doc, lots of compositing, use of motion function.
Will an imac quad i5 with 8gigs be enough to handle project or do I want an i7?
Getting started soon is the issue not price difference. Can pick one up apple store today
or wait a couple of weeks to get i7 from Shanghai, hoping there are no traumas to navigate.

What you should be considering isn't processing power, it's hard-disk space and the ability to add-on more disks and external devices. There are several threads about the iMac vs Mac Pro question and for most users a tower is most appropriate for heavy-duty video editing.

Any current model iMac can "handle" FCP but it's not suited to large jobs or those requiring external connectivity to large arrays or external monitors for proper color grading.

If you're stuck on the iMac concept then get whatever is available now; slightly more processing power isn't going to make a noticeable difference in your workflow or how long it takes to do the work.

I would never disagree with Robert's learned advice (and he IS quite correct) but allow me to add that my main edit computer for the past nearly 3 years has been a white iMac CoreDuo at 2.16GHz and I get by just fine editing ProRes material sourced in 720P60 HDV. Will I buy another iMac? Possibly, JUST for the convenience of portability (personally i can't STAND editing on laptops...) but my eye is focused on the next gen of Mac Pro towers. If I do another iMac, it will be an interim and B-Suite setup.

Caveat Emptor: do I wish my renders were a bit faster and my response time on 12 layer comps was better? ABSOLUTELY. In MY case, I knew I was relocating and wanted to wait until I was fully prepared to do business in my new city PRIOR to buying my next edit bay, knowing full well that the longer you wait, the better the system you end up with IF you don't need it right away for revenue generation.

My 2 cents...

"I would never disagree with Robert's learned advice..."

No, please, disagree. I hate being right all the time! (laughs) Seriously, I learn more from mistakes and being wrong than being right, so correct me at any chance you get. I'll be happy to pass along any corrected knowledge!