It's unclear what the added processor power will be used for. It may be necessary for PSP Go-specific features, like in-game XMB. But will it be used in more traditional gaming applications? If so, could we possibly see PSP Go-exclusive games? Perhaps. Nintendo has released a very small number of applications exclusively for the upgraded DSi, which also features a much beefier processor than its predecessor so there's portable precedence.
Update: Sony says the 480MHz was referring to the USB.
[Via Sony Insider]