This should work out of the box; powernowd loads and uses the 'ondemand' governor instead.
Cat you paste the output of:
cat /var/lib/acpi-support/*-*
** Changed in: linux-source-2.6.17 (Ubuntu)
Sourcepackagename: linux-source-2.6.17 => powernowd
** Changed in: powernowd (Ubuntu)
Status: Unconfirmed => Needs Info
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Core2Duo powerstepping doesn't work
https://launchpad.net/bugs/63439
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