support.microsoft.com/kb/896256

I am using Intel Core 2 duo processor. My question is, whenever I run my application I would like to know whether my software is using both the processors or a single processor. How do I know it? Is there any way to see that? If it is using single processor, how to make use of both the processors? Please help me out. I need this to improve my software performance.

Fire up task manager > performance tab and look at the graph. (might need to change the display in view > CPU History)

It's really dependent on the age and type of software as some still don't take advantage of multi-core chips.

If your using vista this will help
http://www.howtogeek.com/howto/windows-vista/start-an-application-assigned-to-a-specific-cpu-in-windows-vista/