Per Morfix, the root is הדר, meaning "exalted". A bit hyperbolic for a cheese, but "great" is too simple a superlative. I think "splendid" might be more in line with נהדר. What do you think?
Dov, I'm wondering where you live. I'm in Pennsylvania, USA, and I don't think I've heard "splendid" in many years. Reminds me of movies from the 30s or 40s.
I live in New York City. I write, teach college and am a management consultant, which I think may be more to the point. How would you translate נהדר? I think "great" is a boring superlative. And "awesome" is overused, and, frankly, tired.