Upgrade to higher memory or faster processor on MacBook Air I'm zeroing on buying the 2012 MacBook Air. My usage of the machine will be mostly for development work (MySQL, Eclipse, Xcode, Android, etc.). I will also be running Windows 7 with SQL Server in a virtual box or by using Boot Camp. My question is which upgrade will result in the most bang for the buck: more RAM or a faster processor? Does putting higher memory/processor make the machine run hotter?
With all that stuff you're running, you probably won't be happy with 4 GB of RAM. If it's truly an either/or decision, up the RAM unless you know that you won't be paging with only 4 GB. 

The processor goes from a 1.8 GHz Core i5 to a 2.0 GHz Core i7. I'm not sure that's all that much of a noticeable increase.

As for temperature, Apple will put in a sufficiency of cooling regardless of the processor you choose. I don't really get why people get freaky about laptop heat output: any heat problem I've ever heard of is due to environmental factors that the user (not the manufacturer) has control over.

All that said, I got a 2012 MacBook Air with 8 GB RAM and the 2.0 GHz Core i7, and I'm super happy with it. It's noticeably faster than my previous, a 2011 Air with 4 GB RAM and the 1.8 GHz Core i7, but I suspect that's mostly the RAM and the better graphics between the 2011 and 2012 models. 

tl;dr: probably the RAM, maybe the processor. It all depends on how you're going to use the machine.