This tutorial shows you how to upgrade from the generic kernel that is designed for the Desktop to a kernel that provides better use of a higher end CPU, in this example a Dual Core Xeon.
Read it here
First some basics about the kernel. The Linux kernel is the operating system itself. All other applications are loaded on top of the kernel. The kernel helps the hardware and device drivers to interface. The kernel is loaded into memory when the system starts and remains in memory.