How does a computer actually work? You know, like, really?

How does a computer really work? How does a central processing unit, primary and secondary memory and peripherals like a keyboard, monitor and mouse all come together to make a computer that we all use every day?

Big questions include:

1. What is a CPU?
2. What is primary memory?
3. What is a bit?
4. What is binary?
5. How do computers represent data?
6. Our CPU's work at millions of cycles per second. What happens in one cycle?
7. What rules govern the logic of a computer?

This is the essence of computer science: understanding the fundamental constructions of these machines.

You should be able to understand how data is stored in memory. You should be able to build an application to perform primative image recognition and manipulation. You should be able to analyze resource limitations in a system and understand how a processes is using system resources. 

Outline the architecture of the central processing unit (CPU) and the functions of the arithmetic logic unit (ALU) and the control unit (CU) and the registers within the CPU.
Describe primary memory.
Explain the use of cache memory.
Explain the machine instruction cycle.
Identify the need for persistent storage.
Describe the main functions of an operating system.
Outline the use of a range of application software.
Identify common features of applications.
Define the terms: bit, byte, binary, denary/decimal, hexadecimal.
Outline the way in which data is represented in the computer.
Define the Boolean operators: AND, OR, NOT, NAND, NOR and XOR.
Construct truth tables using the above operators.
Construct a logic diagram using AND, OR, NOT, NAND, NOR and XOR gates.