Parallel processing involves performing multiple tasks simultaneously to increase computational speed. It can be achieved through pipelining, where instructions are overlapped in execution, or vector/array processors where the same operation is performed on multiple data elements at once. The main types are SIMD (single instruction multiple data) and MIMD (multiple instruction multiple data). Pipelining provides higher throughput by keeping the pipeline full but requires handling dependencies between instructions to avoid hazards slowing things down.