The engine pumps more fluid at higher rotating speeds providing the opportunity for more power output. Maximizing inlet and exhaust efficiencies, optimizing combustion, minimizing heat lost to the cooling system, and weeding out friction losses are some of the details that lead to power increases. A portion of the piston top is flat and, at top dead center, this area comes very close to touching the flat surface of the head outside the combustion chamber. Cosworth and, probably other engine builders also, make sure they maximize the squish effect with a special final machining operation. The clearance between the piston top and the head surface can vary due to tolerances in connecting rod length, block deck height, and piston pin location.
Sponsors show the value they receive from racing by tossing more and more money at the teams.
Winning is extremely important and keeping score on the competition between the car brands is a part of every TV show. I've heard stories about Dodge getting favorable treatment in the Truck series to encourage their success. I'm already hearing guys speculate that the same kind of thing will happen when Dodge starts racing in Winston Cup next year. Sometimes the infraction is not made public. The Detroit manufacturers see big benefits in winning races and championships so they're willing to spend big bucks on technology.