There are a lot of non processors. Technically a processor takes a binary input and gives a binary output, it also has to do a number of standard functions. For example it has to be able to add, subtract, and do other bitwise operations. It can also pass on information to other parts of a computer, for example the ram.
On the other hand there is the CPU which is a Central Processing Unit. If a piece of electronics is at the center of your electronics (not physically) and controls the rest, then it could be classed as a CPU.
This is just in Powder Toy I am sure it differs in real life.
@snowfire777 voted up, if you wanted to take the next step to awesomeness, i would wire it up so one buttton would make a 1 on the lcd another would make a 2, etc. and then even letters if you wanted, but i havent gotten that far yet so ya..
@Hellome the memory is good, but here are some tips: when the bit=0, and read is activated, the output is 1, this needs to be fixed, also i would combine the read and erase functions into one, so when you read, the information leaves. and is lock very necesary? i dont think so, but if at least the first one is fixed, you have my vote :)
I LOVE the other one, what really got me is the spark multiplier and the 1 use wire, as i have been trying to find a non-neanderthalic way of doing this myself, and these are obvious and perfect :)