Interesting choice for a first post, welcome.
That said, $1200 should get you a laptop that will play it high end if you stick it out long enough. I recommend heading to notebookreview.com and go to their buy/trade section. Pretty much everything posted there are laptops.
EDIT:
Ah a fellow Michigander I see.
Thanks =)
I've been a long time reader of AT and just recently got bored, decided to check out the forums and found this topic that is almost exactly the same situation I was in a couple months ago. I was also looking for a 15 inch laptop with decent gaming ability and in the $1000 price range.
I figured the i7-2630qm (same level as the i7-2670qm) was the best balance between cost($$), performance(ghz) and future-proofability (cores). After reading the AT article on the l502x about it's screen and speakers I knew I had to get one myself too. My laptop is almost exactly the one I described: i7-2630qm, 4gb ram, 500gb hdd, gt540m, centrino1030 with bluetooth, fhd lcd screen, backlit keyboard and dvd drive. Came to about 1050 before tax. I then added one of those ebay optical bay adaptors (about <$15), vertex2 160gb ($150 bnib off kijiji), and 4gb ram (bought 2x4gb for $40 at canada computers sale, gave original stick to a friend).
Somethings that I have learned since: gt540m is pretty much the gt525m at higher clocks. Some people say $100 is a waste to upgrade since u can juts get gt525m and overclock it (although gt540m comes with 130w adaptor vs 90w adaptor...). Other people then point out that you can also overclock the gt540m, which should be able to go higher since it was probably a higher quality in the first place to be binned as a gt540m. Personally I found out after I had bought the laptop, but even if i had known i still dont know what I would have done.
As for the ssd, I put it where the original hdd was (its a bit of work getting to the hard drive bay, but nothing as difficult as all the whining about it leads you to believe) and put the hdd in the ebay optical drive adapter (12.7mm) which fit perfectly where the dvd drive was. There was a bit of vibration because the hdd was a bit smaller than the space given to you by the adapter but I just stuck some stuff to pad the sides and top and now it is super quiet.
Ram is easy to install as any other laptop and worked perfectly so no need to write about that.
Overall I am quite satisfied with it so far... no problems at all. I don't really have any comparable laptops to judge it against though. There is one thing that bothered me a bit but it is a really specific complaint. The xps15 only has mini display port and hdmi... which would be OK except I bought a dell u2312hm that has vga, dvi and displayport but only comes with vga and dvi cables. If you need to connect your laptop to older display things (like projectors in schools?) then the lack of vga/dvi might be a turnoff but nothing a $3 adaptor cant solve.
The one thing I really liked about it is that it comes with the dell battery meter which you can use to turn on/off battery charging. I don't know if it actually does anything, but it makes me feel a lot better to turn charging off while it is plugged in.
One more thing about the ssd: I used to hibernate a lot but the ssd bluescreens quite frequently when I wake it from that, so now I just sleep instead. It will bluescreen once in a while so I make sure to save all important things first, but other than that I am ok with it since I got it at such a good price.
edit:
oops forgot to answer OP's questions. Apparntly the 15z's screen and speakers, what I consider the main reason for choosing the xps15 over others, are not really that great. I think AT has an article about that too, but from what I can remember the 1080 screen is just mediocre and the laptop is not big enough to fit the mini-subwoofer thingy that makes the xps15 sound good.
As for the processor, I had a choice between i5-2410m, i7-2630qm, i7-2620m, i7-2720qm. I was originally going to go for the i5, but the i7-2630qm was only slightly more $$. As for the 2620m, dell had it priced $100 more and although it has faster clockspeeds, it is only dual core. The general opinion at the time was to go for i7-2620m if you wanted power right now, and i7-2630qm if you wanted better value in the future. The 2630qm seemd fast enough (since I was already considering the i5) and at $100 less, it was an easy choice for me.
The 2720qm is powerful, but at $200 more it just seemed like overkill and pushed me wayyy over my budget. I would wager that adding an ssd for the cost of the 2720qm upgrade would give you much more noticeable gains for general usage.
Other laptops I considered were the macbook pro 13 (for resale value pretty much.. which is why I was also looking at i5-2410m+hd3000 combos), thinkpad t420 (always wanted a 'business' laptop.. then realized there was no point), asus g-series (again, figured the graphics card was overkill for me and would come at a cost of battery life + heat), hp envy (heh... actually this thing was way overpriced but i had a look at it anyways since it had a 2nd gen sandy bridge and backlit keyboard). the XPS 15 by far was the best fit for my needs, and I have had really good experiences buying stuff from dell, so I went for it and haven't regretted it at all.