Good question, and the honest answer is: Who knows? Both Intel and AMD recently simplified their numbering scheme. The Core2 and Phenom I family go up to 9xxx, the new Phenom/Athlon II's and Core iX chips only have 3 digits. Nice gesture on their part, but the name does not have any direct reference to the specifications of the chip. (Back in the old days, Pentium 200 actually meant 200MHz!)
There are some clues in the number however. The first digit (Core i7-9xx, Phenom II 9xx) generally refers to a specific family of processors with a particular feature set. As this number goes up, you gain more features. For example, the Core i7-9xx has Hyper Threading, the Core i5-7xx does not.
Within a specific family, the last two digits generally indicate higher clock speeds, for example the Phenom II 965 is clocked higher than the 945 but has the same feature set.
This is my take on things, and my examples may not hold in all cases. but it will give you at least a basic idea of the thinking behind the numbering schemes.