Your CPU is basically the brain of the computer, it tells every other component what to do and when to do it. It handles eveything from Video Encoders to AI in a game. It stands for, "Central Processing Unit".
The GPU is like an extra brain in the system, as it handles the 'graphics' side of things; like drawing the geometry in your favourite game, or applying a texture to a 3d model. This piece of kit actually uses RAM (like the motherboard), and this can affect the resolution of textures in the 3d world, as well as other post processing effects. It stands for; "Graphics Processing Unit". It also displays an image onto your monitor(s) .
Hope this helps!
Message edited by sonnyd09 on 02-03-2012 at 09:12:04 AM