The Cell processor was co-designed by IBM, Toshiba and Sony. Configurations can differ, but here's what the PS3's Cell chip will be like:
# PowerPC-based Core @ 3.2GHz
# 7 SPEs @ 3.2GHz
# 512KB L2 Cache
# 7 x 256KB SRAM for SPEs
Basically, a single Cell processor is designed to act like multiple processors working together, or even independently. A Cell processor has a single PowerPC Architecture Unit (PAU) and multiple Synergistic Processing Elements (SPEs). A Cell's PAU dolls out instructions to its various SPEs, which can then independently work on tasks. So for instance, one SPU might be programmed to run a game's AI while another handles physics. Since each one acts independently, multiple calculations can be done simultaneously. It's powerful enough to perform 218 GFLOPS.
Ofcourse all these cores will be hell for the programmers to write code for and fully utilize its capabilities for a long time to come such is the case with the emotion processor (ps2) as well. In the end it all depends on how good the games are but many developers are already worried about programming for all three power pc multi core based consoles (i believe the next nintendo is also power pc) which is the reason why many speculate that game prices will go up for the next gen.