Yes, some lower-cache parts are in fact partially disabled or failed higher-cache parts, but more and more, they are actually separate dies. The Athlon 64 X2 Manchester (512KB) and Toledo (1MB) chips had different codenames as there were two die masks, one for each chips. It turns out that AMD had such good yields on the 1MB products that they didn't have all that many to disable the cache on to sell as 512KB models, so they simply shot 512KB dies to keep up with demand. I imagine that Intel will probably do that with the Core 2 Duo as well as Intel's yields on 65nm are supposed to be very, very good also. It also saves Intel from having to disable larger-die, perfectly functional 4MB chips to meet the demand for 2MB chips when they can use a smaller die 2MB chip from the getgo.