Correct me if I'm wrong, but isn't Altivec just a fancy name for the maths processor in the MPU? If so, then Altivec is to PPC what the 68881 FPU was to the 68000.
Correct, but hugely more powerful. Any program that uses Altivec FP calculations is going to benefit big time (IIRC, some Apple apps have certain operations speeded up by 10 times) so any forthcoming OS4/Application updates are sure to take advantage of it.
Also, the G4's are Multi-processor aware, so
when (not if ;-) ) OS4 becomes able to take advantage of that as well, applications will again be able to take advantage of that speed increase.
-john