What the new tech does
I'm by no means an expert in this field, but the smaller sizes allow more circuitry in a smaller space, and, I believe, allows more computing power using less electrical power. The latter is getting to be a serious design bottleneck, especially for portables. A high-end Xeon dual-core chip of conventional design throws off about 160 watts. Imagine holding a 150 watt light bulb in your hand.
The newest Intel chips have similar capacity, but dissipate only about 40 watts. This is a big deal.
One of the main reasons Apple switched to Intel chips is because they can run cooler.