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Pemalite said:

Clock rates are the frequency at which the transisters etc' operate at.

We haven't hit a "practical limit" thus far, new technologies and techniques are always being discovered which can improve how quickly a transister switches and the frequencies that they operate at. - For example, I remember reading a few years ago of a 100ghz transister.

Take the Intel Atom. - It is actually paired with low-powered transisters, these don't scale in frequency to well but they do save on power consumption.
The Core i7 series however uses transisters which scale in frequency far more aggressively, however they will and do use that little bit more power to pull it off.

Also, extreme overclockers managed to break the 8ghz barrier on the new AMD FX chips, so that 5ghz wall was effectively smashed, a few more die shrinks and maybe the 3D transisters may even improve that situation for stock clocks. (Global Foundries is also working on 3D Transister tech.)

There is allot to CPU design, more than what most people realise, you can watch how a CPU is made here (Dumbed down of course and not showing any architectural stuff.) -http://www.youtube.com/watch?v=qLGAoGhoOhU

What I was actually talking about when I mentioned that we had hit a practical limite of clock speeds is that all major chip manufacturers have hit barriers to making commercial processors that run much faster than 4GHz.  Consider that most architectures saw a doubling of their clockspeed every 18 to 24 months for decades and for the past 7 to 8 years desktop CPUs have been stuck in the 3GHz range. The reason that is most often cited for this stalling is that running these processors at higher speeds makes them run far too hot and makes them too unstable for comercial release.

While I have no doubt that single thread performance will continue to increase, the bulk of increased performance over the past decade has come from the increases to multi-threaded performance; and I suspect this will continue for the next decade.