[drbawb]

When people have a view of software development like this I usually retort by pulling up the Wikipedia page of a modern processor.

For instance right now I'd probably pull up the page for the Intel Core i7 and show them the transistor count.

I say: "You're now in a room. It has <transistor count> light switches. I write the instructions that tell you precisely how to flip those switches. You have <cycle time> to perform each instruction. Also it takes <x> instructions to <do some useful unit of computation>"

It's a bit exaggerated, of course, but it usually shakes their view of computers up a bit :).