I use a MBP with an SSD for iPhone dev. The only difference is the screen size; 15" vs whatever size you have for the Air.<p>Xcode runs much faster now. Its still going to be the slowest (and largest) application you'll load (besides iTunes). But, it doesn't feel as heavy anymore.<p>Builds are <i>much</i> faster for me; one project used to take > 2m30s to build and now builds in just over 1m (between getting an SSD and switching from gcc-4.2 to clang).
I use a 2.4Ghz MB for iPhone dev. I'd love to have a smaller laptop with an SSD, but my games are very, very shader heavy. They run fine on the iPhone4, but the software gpu emulation in the simulator chugs on my machine. I don't expect that 1.6Ghz will be usable for my situation...<p>For everyone else, the SSD should more than compensate for the old CPU. My Win7 box at home has an Intel SSD and it is like butter.