The 360's processor is an IBM PowerPC with three cores. If PowerPC doesn't mean anything to you, then just know that it's the same family of processor that Macs used before they switched to Intel. Basically, the same programming techniques and models that are used for typical computers work on the 360.
The Cell is also PowerPC based, but very different in architecture. There's a PPE and 8 SPEs. The PPE is a PowerPC based core, but it's stripped down; you don't want to run much code on the PPE. The PPE exists to run the OS and (ideally) to farm out work to the SPEs.
The SPEs are basically
vector processors. Let's say you have a bunch of data, and you want to do the same operation to all of them - multiply by 2, for example. On a typical processor, you would have to do these operations one at a time. * On a vector processor, it can do that multiply by 2 operation on many data elements at once. Graphics code benefits from this kind of parallelism; it's basically all vector and matrix operations. But here's the catch: the PS3, like all modern computers and consoles, has a specialized graphics card (that basically is a vector processor as well). So the Cell is not handling the graphics code. I'm not a game programmer, but I doubt that the kind of code that's left over benefits much from a vector processor.
But that's why I'm not sure why Sony put Cell in the PS3. The reason it's so damn hard to program for is the SPEs have 256k of local storage. They can't communicate with main memory the way the PPE and typical processor can. If code on an SPE wants to read or write data from main memory, the
programmer needs to explicitly request that data. This is not the normal state of affairs; normally, the programmer just says in his code what locations in memory he's concerned with, and the
hardware loads or stores it for him. Doing this by hand is tedious and error prone.
Consequently, it's a non-trivial problem to figure out best use the SPEs in a non-trivial application (which games certainly are).
Anyway. I know all of this crap because my research has shifted to Cell. I'm basically doing code generation to abstract away a lot of this mess so the programmer can pretend they're using a normal processor.
ADDENDUM: Note that IBM makes the processors for the PS3, 360 and Wii. No one really mentions this on games sites, but all game consoles now have IBM processors. I think this is part of the reason why they didn't make a great effort to keep Apple.
*
I'm simplifying things a lot. Processors like Pentiums, Core Duos, PowerPCs and the like use instruction level parallelism to do multiple operations at once. Intel also augmented their chips to do some vector operations with SSE and SSE2
