Considering Macbook Air 11" as primary computer

Hey, guys. I'm sure you get this question all the time--and I have read into number of threads on this myself--but I still have a few questions about my particular situation I'm hoping I could get answered by some kind souls!!
I'm a 13" 2008 Macbook owner that I would like to upgrade to a new Mac. My Macbook's basic specs are this: 13", 2GB RAM, 2.4ghz processor, with OS X 10.5.8. I'm close to pulling the trigger on the MBA 11" and intend on using it as my primary computer. The MBA 11" I would be getting would have 8GB RAM, 2.0 ghz with 3.2ghz turbo boost. Will I notice a jump in speed, or will it stay relatively the same? The reason why I ask this is because I will actually be going down from 2.4ghz to 2.0ghz... RAM size, of course, will be greatly increased.
I don't usually put my current 2008 Macbook through very intense tasks. I'm assuming I'll have more than enough power in the MBA for what I'll be doing, but as I'm sure you understand I'd like to make sure before I shell out $1500 for it. So, I use my 2008 Macbook for web browsing (multiple windows and tabs), HD video streaming and playback, listening to music, word processing, organizing photos on iPhoto, airplay with Apple TV to my TV, etc--nothing very demanding of the computer, right? Basically I just want to be sure that this computer will play HD videos without being choppy and open and run all these programs quickly and without delay as my 2008 Macbook is starting to do. Best case scenario is I have more than enough power for all of these tasks, so let me know!!
What I like about the MBA ultra-portability factor, where I can whip out a device with a full-sized keyboard and type out a lot faster than I ever could on a more portable iPhone or iPad. I understand I'll be sacrificing power--but if the 11" MBA can handle all the tasks I do already with ease, I'll be fine.
I will be using it at home a lot as well, and may possibly get Apple TV to have everything on the larger screen. Hard drive space isn't a big deal for me.
Finally, will the drop from 13" to 11" be a very big deal? I have seen the 11" in person, and while it does look quite small indeed, I am not turned off by "small" as most of the people I have asked for advice seem to be. However, if someone can put in their two cents in on extended use with the 11" inch screen, that would be great. I think it wouldn't be a problem for me, but any advice from someone who uses one would be great.
Any other words of advice you feel important enough to share would be greatly appreciated as well. Thanks a ton guys!!

Just for clarification, all size hard drives (128, 256, and 512) are all SSD right?
After this thread, and a couple of other threads such as these:
Anyone here using their 11" Air as their primary computer?
Has the Air become your primary computer?
Core i5 Macbook Airs approach perfection
(written for the 2011 models)
I'm leaning heavily towards the 11" MBA fully loaded (8GB, 2.0ghz minus the larger hard drive... keeping it at 128gb).
Thanks for all the great answers guys. If anybody else has their two cents to add in, it would be greatly appreciated.

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