if there are only advantages to undervolting, why doesn't Apple build this right into the system? Surely they would want the extra praise their machines would get by the press & users, if they ran so much cooler and longer ...
Something has got to be wrong. Any EE major on this forum who can comment?
I agree, when first reading about this it seems like a "that can't be possible - if it is, the manufacturer would do it" kind of situation, almost like chipping your cars ECU to make it more fuel efficient AND more powerful! (Note: I don't think ECU chipping and undervolting are directly or even remotely comparable

) However, when you understand the logic behind it you will realise that undervolting can and does give between moderate and amazing gains if you have the patience and knowledge needed.
Apple doesn't do this in the factory for the same reason why every Intel CPU isn't "overclocked" from the factory. Basically, not all CPUs are created equal. Some are better, some are worse. Once Intel has manufactured a CPU, they test it to see how well the CPU performs (what clock speeds it can hit at what voltage and what temperature) and then set default voltages, multipliers and FSB speeds based on that. Therefore, if two CPUs come off the production line one after the other having gone through the same process, one may end up as a E6750 while the next may be an E6550.
Now, obviously, Intel has split up their product line into a finite number of CPUs (E6550, E6750, E6850, following from my earlier example). All have the same core, same design, etc - just different clock speeds set based on the individual CPUs performance. Now, a couple of things lead to the ability to overclock / undervolt:
1. The CPU may fall somewhere in between - IE, it's just not good enough to be an E6750, so they mark it an E6550. Someone who buys this CPU can then comfortably overclock it beyond the E6550 rating. The same applies with overvolting. You may find that a 1.83ghz 'normal' Core 2 Duo was just too power hungry to be a 1.6 Ghz LV Core 2 Duo, so it was marked a normal CPU - but that there's still a lot of headroom for dropping the volts.
2. Intel's fabrication plant gets so good and reliable that they are consistently producing CPUs in the top bracket. Now, they don't only want to sell E6850's - hence some of the CPUs, even though they are more capable, are marked and sold as lower speed CPUs depending on demand, their marketing strategy, etc. That seems to be the case at the moment - just about every E6550 or E6750 OC I've read about hit 3GHz +. A similar thing happens with the mobile CPUs - Intel wants to be able to sell more expensive LV and ULV chips to their customers, so they limit the minimum lowest voltage that the CPU runs at by default to a higher level than it could safely run at.
Answering your original question, Apple doesn't do it themselves because of the cost and difficulty that would be involved. Not all CPUs at the same rating will have the same ability to undervolt - so it's very hard (if not impossible) for Apple to go through and test every CPU and bin the chips themselves.
(Some boutique PC builders have done this, on the overclocking front. They buy 50 high end chips, test each to see the overclock, and then sell the best performers for more in highly overclocked rigs).
However, just because it's too hard for Apple to do when they are millions of laptops a year, it's not too hard for me to do! Your results will of course vary (for all the reasons listed above) but there's no harm in testing out at what volts your CPU will run and deciding if the benefit is worth it for you.