While the GHz has a large effect on the speed of the processor, there are many other factors which decide it's total speed, such as architecture and design.
And no, for dual/quad/etc. CPUs, you don't add the GHz together.
The i7 is a quad-core, and while slower (or about the same speed) as the Core 2 Duo when it's at 1.8GHz, it increases when there's real processing to be done, so it's not only faster GHz-wise, it's also a quad-core meaning there's twice as much in the way of resources.
A surprisingly non-technical answer, but I hope it helps