Enhancing the capability of a microprocessor ?

The computing capability of a microprocessor can be enhanced in many different
ways: 

By increasing the clock frequency
By increasing the word-width
By having a more effective caching algorithm and the right cache size
By adding more functional units (e.g. ALU’s, FPU’s, Vector/SIMD units, etc.)
Improving the architecture.

kHz, MHz, GHz (Clock Frequency)

4004 worked at a clock frequency of 108kHz
The latest processors have clock freqs. in GHz
Out of 2 microprocessors  having similar designs, one with higher clock frequency will
be more powerful   
Same is not true for 2 microprocessors  of dissimilar designs.  Example:  Out of
PowerPC & Pentium 4 microprocessors working at the same freq, the former performs
better due to superior design.  Same for the Athlon microprocessor when compared with
a Pentium.

4-, 8-, 16-, 32-, 64-bit (Word Length)

The 4004 dealt with data in chunks of 4-bits at a time
Pentium 4 deals with data in chunks (words) of 32-bit length
The new Itanium processor deals with 64-bit chunks (words) at a time

Moore’s Law

Moore's law(1965) is an empirical observation stating in effect that at our rate of
technological development and advances in the semiconductor industry the complexity
of integrated circuits doubles every 18 months. His original empirical observation was
that the number of components on semiconductor chips with lowest per-component
cost doubles roughly every 12 months, and he conjectured that the trend will stay for at
least 10 years. In 1975, Moore revised his estimate for the expected doubling time,
arguing that it was slowing down to about two years

Why Intel came up with the idea?

A Japanese calculator manufacturer, Busicom wanted Intel to develop 16 separate IC’s
for a line of new calculators. Intel, at that point in time known only as a memory
manufacturer, was quite small and did not have the resources to do all 16 chips. Then
Ted Hoff came up with the idea of doing all 16 on a single chip. Later, Intel realized that
the 4004 could have other uses as well.  
Currently Intel came with – Intel Pentium 4 (2.2GHz).
It was introduced in December 2001. It got 55 million transistors. 32-bit word size.
Within the processor it has 2 ALU’s each working at 4.4GHz. It costs around $600.

The 1 st microprocessor : Intel 4004

The first microprocessor was the Intel 4004,  introduced in 1971. The 4004 was not very
powerful all it could do was add and subtract, and it could only do that 4 bits at a time. But it
was amazing that everything was on one chip. Prior to the 4004, engineers built computers

either from collections of chips or from discrete components (transistors wired one at a
time). The 4004 powered one of the first portable electronic calculators. It was as powerful
as ENIAC which had 18000 tubes and occupied a large room. It cost less then $100. Its
targeted use was of calculation. It consisted of 2250 transistors and 16pins. Speed was 108
kHz, 60,000 ops/sec.

Instruction Set

The set of machine instructions that a microprocessor recognizes and can execute – the
only language microprocessor knows
An instruction set includes low-level, a single step-at-a-time instructions, such as add,
subtract, multiply, and divide
 Each microprocessor family has its unique instruction set
Bigger instruction-sets mean more complex chips (higher costs, reduced efficiency), but
shorter programs
An  instruction set, or instruction set architecture (ISA), is a specification detailing the
commands that a computer's CPU should be able to understand and execute, or the set
of all commands implemented by a particular CPU design. The term describes the
aspects of a computer or microprocessor typically visible to a programmer, including the
native datatypes, instructions, registers, memory architecture, interrupt and fault system,
and external I/O (if any). "Instruction set architecture" is sometimes used to distinguish
this set of characteristics from the Micro-Architecture, which are the elements and
techniques used to implement the ISA, e.g. microcode, pipelining, cache systems, etc.
Bigger instruction-sets mean more complex chips (higher costs, reduced efficiency), but
shorter programs. Each microprocessor family has its unique instruction set. Following
are the few ISA;
MIPS  
Motorola 6800  
ARM  
PowerPC  
x86 (Pentium)  
ALGOL Object Code  
SPARC 

Control Unit

A  control unit is the part of a CPU or other device that directs its operation. The
outputs of the unit control the activity of the rest of the device. A control unit can be
thought of as a finite state machine. It is called the brain of computer microprcessor. It
manages whole process of the microprocessor. For it identifes which data is sent to the
ALU or memory etc.
At one time control units for CPUs were ad-hoc logic, and they were difficult to design.
Now they are often implemented as a microprogram that is stored in a control store. 

Registers

A  register is a device for storing data. It is a small amount of very fast computer
memory used to speed the execution of computer programs by providing quick access to
commonly used values. These registers are the top of the memory hierarchy, and are the
fastest way for the system to manipulate data. It is common to measure registers by the
number of bits it can hold, for example, an "8-bit register" or "32-bit register". Registers
are now usually implemented as an array of SRAMs, but they have also been
implemented using individual flip flops, high speed core memory, thin film memory, and
other ways in various machines.
There are several other classes of registers:
Data registers are used to store integer numbers. 
Address registers hold memory addresses and are used to access memory. 
General Purpose registers can store both data and addresses. 
Floating Point registers are used to store floating point numbers. 
Constant registers hold read-only values (e.g zero or one). 
Vector registers hold data for Single Instruction Multiple Data (SIMD) instructions. 
Special Purpose registers which store internal CPU data like the stack pointer or
processor status words. 
The ALU & FPU store intermediate and final results from their calculations in these
registers. Then the processed data goes back to the data cache and then to main memory
from these registers.

Floating-Point Unit (FPU)

A  floating point unit (FPU) is a part of a CPU specially designed to carry out
operations on floating point numbers. Typical operations are floating point arithmetic
(such as addition and multiplication), but some systems may be capable of performing
exponential or trigonometric calculations as well (such as square roots or cosines).
Not all CPUs have a dedicated FPU. In the absence of an FPU, the CPU may use a
microcode program to emulate an FPUs function using an arithmetic and logical unit
(ALU), which saves the added hardware cost of an FPU but is significantly slower.
In some computer architectures, floating point operations are handled completely
separate from integer operations, with dedicated floating point registers and independent
clocking schemes. Floating point addition and multiplication operations are typically
pipelined, but more complicated operations, like division, may not be, and some systems
may even have a dedicated floating point divider circuit.