Here's the gist of how processor power works.
Back in the days of single core processors it was common to see 3.5 ghz processors or higher (up to 3.9 or so) since the faster the single cpu was the more work it could push through at once.
With dual core (or more) processors you now have two CPUs to handle the work load instead of only one. That means less work for each one to process. Not all applications at this point make use of more than one core, but you get the idea.
The reason we have see processor clock speeds go down over the years as the number of cores goes up, is because of the problems that come with faster clocks in CPUs. A cpu running at 3.5 ghz generates a lot of heat already, so imagine how much heat it would generate if you put in two or more of them running at the same speed. Not everyone can afford the kind of cooling systems it would take to keep that kind cpu cool enough to not blue screen your system after five minutes from overheating.
Also, in order for a super powerful 3.5ghz+ multicore processor to run at its full potential, it can't be limited by any other hardware in your system. As of right now, affordable memory and hard drives do not run efficiently enough to handle the kind of speed a multicore processor would put through them if it were running at anything higher than 1.5-2ghz.
So a 1.5 ghz 8 core processor could decently handle the same load as a 8-12ghz single core processor in theory. That's really not too shabby.
TL;DR - Clock speed is not the only important factor in determining how much a CPU is capable of.
There has been no official statement yet for Microsoft if the rumor is true. AMD 8 core is good enough to handle multitasking and can zip big games. Besides, it is also rumored to use 8GB of RAM, that is twice the amount in PS4.
I've heard that the PS4 will use the same amount, but those are rumors and should be treated as such. Microsoft and Sony have not released any official statements, so it's far too early to start talking about which one has the better specs. Nobody really knows what they are.
