I have done research in quantum computing, and here is what I hope is an informed answer.
It is often said that qubits as you see them in a quantum computer can exist in a "superposition" of 0 and 1. This is true, but in a more subtle way than you might first guess. Even with a classical computer with randomness, a bit can exist in a superposition of 0 and 1, in the sense that it is 0 with some probability and 1 with some probability. Just as when you roll a die and don't look at the outcome, or receive e-mail that you haven't yet read, you can view its state as a superposition of the possibilities. Now, this may sound like just flim-flam, but the fact is that this type of superposition is a kind of parallelism and that algorithms that make use of it can be faster than other algorithms. It is called randomized computation, and instead of superposition you can say that the bit is in a probabilistic state.
The difference between that and a qubit is that a qubit can have a fat set of possible superpositions with more properties. The set of probabilistic states of an ordinary bit is a line segment, because all there is a probability of 0 or 1. The set of states of a qubit is a round 3-dimensional ball. Now, probabilistic bit strings are more complicated and more interesting than just individual probabilistic bits, and the same is true of strings of qubits. If you can make qubits like this, then actually some computational tasks wouldn't be any easier than before, just as randomized algorithms don't help with all problems. But some computational problems, for example factoring numbers, have new quantum algorithms that are much faster than any known classical algorithm. It is not a matter of clock speed or Moore's law, because the first useful qubits could be fairly slow and expensive. It is only sort-of parallel computation, just as an algorithm that makes random choices is only in weak sense making all choices in parallel. But it is "randomized algorithms on steroids"; that's my favorite summary for outsiders.
Now the bad news. In order for a classical bit to be in a superposition, it has be a random choice that is secret from you. Once you look a flipped coin, the coin "collapses" to either heads for sure or tails for sure. The difference between that and a qubit is that in order for a qubit to work as one, its state has to be secret from the rest of the physical universe, not just from you. It has to be secret from wisps of air, from nearby atoms, etc. On the other hand, for qubits to be useful for a quantum computer, there has to be a way to manipulate them while keeping their state a secret. Otherwise its quantum randomness or quantum coherence is wrecked. Making qubits at all isn't easy, but it is done routinely. Making qubits that you can manipulate with quantum gates, without revealing what is in them to the physical environment, is incredibly difficult.
People don't know how to do that except in very limited toy demonstrations. But if they could do it well enough to make quantum computers, then some hard computational problems would be much easier for these computers. Others wouldn't be easier at all, and great deal is unknown about which ones can be accelerated and by how much. It would definitely have various effects on cryptography; it would break the widely used forms of public-key cryptography. But other kinds of public-key cryptography have been proposed that could be okay. Moreover quantum computing is related to the quantum key distribution technique which looks very safe, and secret-key cryptography would almost certainly still be fairly safe.
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