I have a "true" 5hp 220 volt, 30 gallon compressor made by Coleman (Sanborn), and it's plenty capable of running my big honkin' impact gun, cut-off tools, die grinders, and even paint guns. It runs the impact with no sweat whatsoever, but it can just barely stay ahead of the high CFM requirements of painting or running a high-RPM tool like the die grinder.
Be aware that most of the U.S. General/Harbor Freight compressors are crappy chinese made junk. This can be compounded by their shitty (yet attractively priced at $5) air tools.
My compressor is VERY capable, but if I put my cheap-ass Harbor Freight die grinder on it, it's kicking on every 45 seconds to keep it running at top speed. Those tools are built to sell for 5 bucks, and virtually NO engineering has gone into making them efficient.
Moral of the story? If you're going to buy from Harbor Freight, you need to know what you're getting into. If you buy the cheapo compressor, you'll need to spend money on good tools - you'll never run the cheap tools with that compressor. Likewise, you can buy the better compressor, and cheap out on tools. You just can't cut corners on both items.
My advice is to spend the money on a better compressor, and cheap out on the tools. For my money a "good" compressor would have these traits:
1. Indirect Drive - aka: belt-drive. they're quieter, and generally more powerful. Plus if the motor burns out, you can just buy a generic new one. (or a bigger one

) But most importantly, it's the easiest way to ensure that you get the rest of this list.
2. Oil-lubricated pump - the "direct drive, oil less" things that you see in every tool store are loud, inefficient crap. My Sanborn is over 15 years old, and runs like the day it was new. Try that with a $150 Crapsman, or something from Home Depot/Lowes.
3. 220v - this is not a critical item, and varies depending on what you have available, but it really is a superior tool if it runs on 220.
Side note: owing to physics and electromotive laws, any "5hp" electric motor that runs on 110v is a complete lie.
See here for more reading material:
http://www.truetex.com/aircompressors.htm
Good luck