Your laptop has the HM65 chipset which I believe is artificially limited to only Pentiums and Celerons. Although you could put an i5 or i7 in the socket, the laptop would power itself off after 30 minutes.
Don't worry though, the Pentium and i5/i7 have the same number of cores and performance per clock, the i5 and i7 will just have hyperthreading.
You could, however, probably drop in an Ivy Bridge Pentium 2020M or 2030M. These are clocked slightly higher, have ~5% better performance per clock, and use a tad less power. They're also cheap as dirt. This is what I did in one of my laptops.