Nordic Hardware has a pretty interesting article in which Robert 'crotale' Kihlberg investigates how much the L2 cache of the Core 2 Duo series really affects the overall performance by comparing three different processors with 1, 2 & 4 MB of L2 cache running at the exact same speed.
To elaborate further, you can remove all of the cache and make a really cheap processor. It will not only be very cheap, but also extremely slow. But how much does the second level of cache really influence and affect the performance of today's Core 2 Duo processors? We at NordicHardware have gathered three processors, with 4MB, 2MB and 1MB respectively, to investigate this more thoroughly.
You can check out the results over here. They tested in various synthetic benchmarks and some games and conclude that there's a quite big performance difference between CPUs with 1MB, 2MB and 4MB L2 cache. In most synthetic benchmarks they saw big performance differences and even in games they saw boosts of 15-22%.