Technically, it is possible.
You can upgrade the processor. I just upgraded mine earlier today.
I took me about 5 hours and voided whatever little warranty I had left.
The iMacs are standard Intel socket 1155.
As long as your TDP and Architecture is the same, they will work in 27".
Since you have the 2009 27" (as do I, just finished upgrading mine!) the absolute quickest you can go is a Core i7 880.
If you want a guide, HardMac has one.
Everymac has more info on the topic.
Should give you all the info you need.
Also, not to beat a dead horse or anything, but...
Graphics in the 27" are upgradeable as well.
Someone here this last week just popped the 6970 2gb in their late 2009 27". Said it was plug and play. This coming from a thread with no less than 4 other success stories.
So, as far as Apple is concerned, no, what you buy is end of the line.
But if you're technically skilled and patient enough, these machines are indeed customer upgradable.
Misread that. Sorry, thank you for catching my mistake.
Well, to the OP:
If you have a C2D early 2009, you can still upgrade, provided the socket 775 chip you replace the original with has the exact same FSB speed (I believe it's 667, could be wrong though.) and the same power draw/TDP.
But at this point, you'd be painting yourself for very very little gain.
I only went to i7 to speed up my video transcoding in Premiere.
For your machine, SSD and Max Mem is the best way to go.
MacSales.com is your friend.