I don't understand how the internet can make hardware more powerful?
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Magic! Also, it's the hardware connected to your PC/Xbox [i]via[/i] the internet that helps with performance, not the internet itself.
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Hardware is not more powerful... Instead of the local hardware processing physics and such, a server does the processing and simply sends the info to the machine.
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Ah I've got you. That makes more sense, I thought the Cloud was somehow making the Xbox more powerful. I'm pretty technologically inept.
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Which frees up the local machine (i.e. your console) to perform other processing functions that much faster.