It seems apparently lowering heat output (the Pentium D is a notoriously hot running processor), the “ondemand” frequency scheduler is not likely to save power in the real world and has been deliberately broken by the kernel maintainers.
As an email on LKML from October 2009 put it:
p4-clockmod is NOT true CPU frequency scaling, it just forces the CPU to idle on a periodic duty cycle and has no effect on CPU frequency. The clock modulation feature is basically just engaging the same mechanism the CPU uses to reduce heat output when it gets too hot, and which is not meant as a power saving mechanism. When engaged, it does reduce heat output and power usage, but not as much as it reduces system performance, and means the system will simply take longer to return to idle. In short, using p4-clockmod can only increase power usage in any real workload.