That makes sense. Macbooks were an entirely different animal in 2007. I also noticed that Macbooks seem to really want more like 4GB for work with better GUI productivity things.
My 2008 Macbook with 4GB was quite capable, though. Did some big work with it. It wasn't as snappy as my 2009 MBP, though. And the main time I saw some performance hits was working with Final Cut. What's the point? Well, my Macbook was a 2.4 GHZ C2D, and the MBP was a 2.26 GHZ C2D. However, in pretty much all tests, including software that seemed to use the CPU, the MBP beat the Macbook out for performance.
The main thing I could imagine as the reason why was the architecture. Going from the 667 speed architecture to over 1 thousand. Using speedy DDR3 ram as opposed to the Macbook's DDR2. Even a nice bump in performance in doing High Def video in iMovie and Final Cut. Though I do attribute some of the Final Cut performance improvements to the improved video card. However, I can fully use and be satisfied with doing Final Cut work on the 2009 MBP, for even some of the more intensive stuff (for me, at least).
To make plenty of programs work, they don't rely just on CPU. The performance is based on the entire architecture. The speed of memory, the speed of the bus, etc. The 1.6 GHZ is a lower rating, obviously. But the architecture is way better, including the graphics subsystems (what drives everything you see).
So for perspective let's take my work and home example:
When programming, using Microsoft Outlook, anti-virus, and using the browser, the typical worst thing that happens at work is when somehow everything starts stalling, and I hear that harddrive go like crazy, and I have to wait a bit before things are responsive again. This is Vista, a PC with 4GB DDR3 ram and a 3.0 GHZ Core 2 Duo. This happens like every 15-30 minutes in a work day.
Likely amount of times I'll see this happen on a Macbook Air 11" Ultimate running Windows 7 and using the same 2 programs and Norton Anti-Virus:
0.