CPU napping is when the processor dynamically "slews" the power usage up and down, according to how much work the CPU is doing. This is why you hear the chirping sound when you suddenly do something CPU intensive (like activating Expose). Once the CPU has slewed the power consumption up, it will stay up until the CPU usage drops.

I've been disabling processor napping on my G5 since I got it (October 2003) and I have yet to see any adverse effect on my machine. That noise drove me crazy from day one, so I found the CHUD tools back then and wrote myself an AppleScript to eliminate it on startup.

I've noticed that when I turn off napping it makes about a 10 degree C difference in the CPU die temperature reported by "Temperature Monitor" (I have a dual 2.5 G5). Whether this is a problem or not isn't clear, but I've decided that until the chirping bothers me I'm going to allow nap just in case.