The video from my first post is a benchmark video comparing two phones ... one with the Dalvik Turbo installed, and a stock Android phone. The different is incredible.
In layman's terms...
There are several ways to increase the overall speed and/or performance of our DROID. Probably the Top 2 on the list would be a better/faster "Kernel", and an optimized "Dalvik Virtual Machine". See the pic below.
The kernel is the code that runs between the hardware and the core of the operating system. We are currently over-clocking the DROID with edited kernels that tell the cpu to run faster. That's the simplest way to get a kernel to improve overall speed, but certainly not the "best" or "safest" way.
The Dalvik engine (or Dalvik Virtual Machine) is the software that basically links the core of the operating system to your applications. Optimize this, and your whole DROID becomes a heck of a lot zippier.