The Toledo chips are all made from a 2x1MB L2 mask. If the chip passes all of its test and all of the cache comes out working, it stays branded a Toledo. However, if there is a tiny defect that makes less than half of the cache not work, then the chip has 512KB of each 1MB cache bank disabled and is now called a Manchester. These chips are functionally similar to the normal Manchesters (which are made from a different mask than the Toledo and can only have 2x512KB L2 maximum) but have extra non-functional silicon. Note that all Allendale (2MB L2) Core 2 Duos are really 4MB Conroes with half of the cache turned off. Intel will shortly be introducing Allendale C2Ds made from their own 2MB-only mask.
The real 2x1MB Toledos are faster than the Manchesters by a little bit. If you have a Manchester, it will be just a touch slower (0% to maybe 7-8% tops) than an equivalent clockspeed Toledo.