The first picture (picture 1) on the top left is where the CPU is located inside my computer.
The top right image(picture 2) is a picture of the top of this CPU.
The final image is of the underneath of the CPU. Notice you can see what brand of CPU this is. Most CPUs will have a label to identify them.
Click to enlarge the images.
It controls and manipulates data to produce the require information.
Say you're running a calculator program. You type in 1 + 1. The calculator program sends this off to the CPU which does the calculation and then the CPU returns the result. ie 1+1=2.
It gives you a rough outline of what the CPU does. All you really need to know is that the faster the MHz of the CPU the faster calculations it can do. And the faster your computer will run.
Next : The Video Card