Simple Peltier explanation
In order to understand the Peltier effect, you have to understand the Seebeck effect first. Thomas Seebeck discovered that when you form a loop with two dissimilar semiconductor materials with different temperatures, a current will form to establish an equilibrium temperature between the two junctions where the materials meet. One junction will warm up and the other will cool down until both reach an equilibrium temperature.
In 1834, French physicist Jean C. A. Peltier discovered an inverse to the Seebeck effect. If you apply a current to the loop from our Seebeck explanation, one junction will heat up, and the other will cool down because the unnatural current will fool the junctions into trying to establish a new equilibrium.
Peltier coolers use paired semiconductors sandwiched in between two ceramic plates. When a current is applied, one side heats up while the other side cools down. The cool side gets to chill with the processor while the hot side usually gets a fat heatsink and fan.
Peltier coolers are very effective at keeping the processor cool, but they do have a few drawbacks. First of all, while one side gets very cold, the other side gets very hot and requires a sizeable heatsink and fan. If the fan fails you can probably kiss your processor goodbye. Also, the heat given off by the Peltier will raise the internal case temperature, and that isn't good news for those overclocked video cards and 7200RPM hard drives.
Another problem is the power requirements for a Peltier cooler. If you're planning on running the MC1000 in a case with a single power supply, Swiftech requires a minimum of 12 amps at 12 volts. Swiftech warns that even if you have a 300W power supply, it might only be rated at 10 amps at 12 volts, and even suggests getting a second power supply rated at 8 amps at 12 volts just to power the MC1000.
The final problem is condensation. A Peltier cooler can cool down to the point where you have to worry about having water form very close to your CPU. Most Peltier cooling units take measures to prevent condensation.