CPU speed is measured in hertz, which indicates the number of cycles per second that the CPU can execute. A higher hertz value means the CPU can perform more operations in a given time, leading to better performance. For instance, a CPU running at 3 GHz can execute 3 billion cycles per second, making hertz a crucial metric for assessing processing speed and efficiency in computing tasks. Other units like watts, bytes, and volts measure power consumption, data size, and electrical potential, respectively, but do not directly relate to CPU speed.