...Lets say 1 instruction per cycle per Hz. 1 GHZ is a billion Hz. So if you move your mouse and that needs to get processed and lets say it needs to do 1000 instructions. That takes a total of 1/100th (1/1,000th) of a second to complete that task.
Just by watching the task manager you can see how this is handled. When you see that CPU usage is at 17% that means that during the last measured period of CPU use (lets say 1 second) that it was actively processing only 17% of the time. In the example above it would have handled about 1700 instructions (170,000,000 instructions) and the CPU would have been active for about 1/50th (1/6th) of a second.
This did lead to system locks and horrible responsiveness back in the day before multiple cores and HT. If you are running 1 app that just kept having the CPU do work you couldn't even switch to another Window in Windows because it had a hard time finding room for those simple instructions. Encoding work like DVD-Shrink used to bog the system down so hard I would have a Duron machine dedicated to the task so I could always have my system working for me.