Newer processors (most likely, in this case, either Athlon X2 or Core 2 Duo) are much more efficient.
They also have more than one core, so can process more than one thing at once.
The speed difference is incredible - GHz is only one measurement of speed, and can only be used to directly compare processors from the same family.
Think of GHz as engine size on a car - an old 6 litre engine in a tank or something will be slow, but a turbocharged 1.4 litre in a small car will be very quick. Not an exact analogy, but I hope this helps a little.