Why does it look like my Dell 8400 has two processors?

It's called Hyperthreading, Google it.

I understand that it is hyperthreaded, why does it appear as two processors in the Windows Performance Monitor?

because to an OS there is no difference between two logical cores on a single CPU, and two physical cores on two separate CPUs, it treats them identically and will therefore show each logical core as if it were its own CPU.