I would write an in-depth explanation but I see no point as this link
covers all your questions and more.
As for what would be best for you, I think an i5 would be best, but I've got a few questions. How long do you spend gaming (approx.)? How much do you use photoshop? Do you game (or want to game) at low/mid/high/max settings? How much are you willing to spend (bearing in mind you'll probably need a new motherboard)?