What does the XTAL directive really mean?

I am confused by the documentation. It states in the "Getting Started" book that the XTAL [directive in the Target dialog] specifies the CPU clock for my device. "In most cases this value is inentical with the XTAL frequency." When is it not? And if not what do I enter into the field? I am using the EZUSB part from Cypress. I believe that the actual CPU clock speed for a 12MHz crystal would be 48MHz. Should I enter 12 or 48?

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