Processors
Most servers don't need fast processors (also known as CPUs). While some servers perform computationally intensive tasks (such as render farms), most simply store and retrieve data. In these situations, the CPU spends much of its time idly waiting for data to move between memory, storage or the network.
When you're moving data around, your server is only as fast as its slowest component. For most servers, this is the electromechanical hard drive which can be millions of times slower than your CPU. It doesn't matter if your CPU is a million times faster than your hard drive or two million times faster, your data won't move any faster. Also, faster processors throw off more heat which can degrade your server. In the long run, you're better off with a slower processor.
On the other hand, more processors will let your server do more tasks. Servers are expected to be able to handle multiple tasks simultaneously, but CPUs can only work on one task at a time. Multiple CPUs allow your server to work on multiple tasks without switching tasks in and out of memory.
Previously, to put multiple CPUs in a server, you had to use multiple processor chips which raised the price of a server significantly. Since 2005, AMD and Intel have manufactured chips with multiple CPUs called multi-core processors. Servers with multi-core processors provide the parallel processing benefits of a multi-processor server, but are much smaller and cheaper.
Not all operating systems or applications can take advantage of multiple cores or processors. You should find out if your OS or application can benefit from extra CPUs before you make an additional investment.
Another way to speed up servers is to use processors with large amounts of onboard cache memory. CPUs can access data in an onboard cache faster than they can fetch it from main memory. AMD and Intel both manufacture lines of processors for the server market which contain larger amounts of cache memory than consumer grade chips. AMD and Intel market their server processors under the Opteron and Xeon trademarks respectively.
Further resources on processors
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