s upport.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.

most software only works on one of the cores. There are a few applications that are multi threaded applications. If its not a multi threaded application there is no way you can make it run on each at the same time. Now when using the application each core will share the load of the program. So the long and the short is either it can or it cant. 

Like Der said the app must be coded for dual core. You can hit Alt ctrl del in XP and Alt ctrl del and select Task Manager in Vista or 7. The performance and process tabs will show you some info on what is using cpu power and how much it is using.