My understanding is, the block itself and the variable timing/exhaust system (among some other things, I'm sure) are both supposed to be new. I've heard absolutely no reliability issues to date, and that includes no dreaded headgasket issues (apparently, that's new to the '05 model year, too). I don't know too much about the Impreza 2.5 (I'm new to Subarus as a whole), but I did drive few WRXs (and 1 Saab-aru) just before driving an '05 LGT 5MT, I can tell you that you'll notice the difference in HP and in torque, even in spite of the extra weight. The car is really nice, too, overall. It's no rally car, but it is a damn-quick, nice-handling, decently roomy sports sedan. At the last minute, I opted for an OBXT for the added room/versatility (and because we now have 2 dogs).
My advice: Don't drive one unless you're planning on buying one!
Just my $.02
Tim G.
'05 OBXTL-5MT
http://home.earthlink.net/~timo1745/_images/subie_images/new%20subie%20pics%20012_small.jpg
http://home.earthlink.net/~timo1745/_images/subie_images/subie_first_snow/subie_snow%20002.jpg