Explain increased performance via upgraded CPU, RAM, etc…?

I’ve currently installed ubuntu 7.10 after seeing the sweet effects of compiz on uTube. It made me wonder about how the different hardware components could increase applications in different ways.

Some of my questions are:
1. What specifically would a Core2Duo 1.8ghz do better than a 16.ghz and 2.0ghz to a 1.8ghz?
// To my knowledge CPU works on number crunching… so a) compiling faster? b) It wouldn’t help with things such as transparancies? or switching from window to window smoothly?

2. What specifically would RAM help with?
// To my knowledge RAM helps with running multiple apps simultaneously? RAM would help with the transparencies?

3. What would be more helpful for running apps such as iTunes, FireFox(7-8 tabs open), VLC, 1-2 IE windows, eclipse, Rocketdock, and 4-7 Word process and notepad files…RAM or a higher CPU?

4. Hard Disk Driver only improves how fast an app is loaded into RAM correct?? So a 5400RPM HDD would load iTunes slower than a 7200PRM. And that’s it?