NVIDIA released a couple white papers this week detailing some of the design decisions behind its upcoming quad-core Tegra 3 mobile processor, codenamed "Kal-El." In particular, Kal-El aims to bring desktop-like performance in gaming and video, and nearly double the raw compute performance of current dual-core ARM-based mobile chips, while still saving power. To do so, Kal-El uses a combination of four "fast process" cores mated to a 5th "low power process" core that handles idle background processing tasks.
Kal-El includes four ARM Cortex A9-based cores designed on a 40nm process. The transistors that make up these cores can be switched at higher frequencies while using a lower operating voltage compared to, say, transistors on a 65nm process. Optimizing Kal-El for higher operating frequencies allowed NVIDIA to lower the operating voltage of the cores.
This lowering of core operating voltage is critical to improving Kal-El's power efficiency. The power draw of any processor is largely made up of dynamic power use—the power needed to switch its various transistors on and off billions of times per second—and a tiny amount of "leakage" power caused by current that "leaks" across the tiny gaps between conductors in a transistor.
Dynamic power in a processor is proportional to both the operating frequency and the square of the operating voltage. This makes it possible to increase the operating frequency—i.e. make the processor faster—while still reducing overall power consumption by reducing the operating voltage.
Since Kal-El's four main ARM cores can run at higher frequencies but lower voltages than the current dual-core Tegra 2, the chip can either match Tegra 2's performance within a much lower power envelope, or it can nearly double the performance of Tegra 2 while still using slightly less power overall.

There is a downside to this shrinking of the process to increase the performance-per-watt, however. The smaller transistor gate gaps increases the amount of leakage current that flows throughout each core. So while Kal-El's cores end up using less power under heavy load than the Tegra 2, those cores would end up using more power while a device is in an "idle" or standby state—running low priority background processes such as checking for new e-mails or tweets, receiving push notifications, running timers, and more.