Gee I wish I would have joined this thread earlier - I could have cleared it up by saying that the torque measurement tells how much a weight can be moved (400 foot pounds - or how much effort it takes to lift 400 pounds one foot) and horsepower (how long it takes to lift that 400 lbs one foot in the air).
(Torque x Engine speed) / 5,252 = Horsepower
5252 is the result of many formulas, including rpm's to rps, foot pound to pound feet, etc - basically take all of those conversions, and you get 5252. Because of this, the torque and hosepower lines will cross at these two points. If someone really wants me to post the real formula - I suggest you do a google search, I'm sure something will come up.
All engines make torque, all engines make horsepower.
The faster you spin an engine, with everything else equaled, the more HP it makes because the work is happening faster.
What we call a torque engine is just some term humans use to catagorize things. If the engine makes max power below 5252, the printed out dyno curve is going to make the torque curve higher than the HP curve - and humans will say it is a torque engine. Conversely if the max HP happens above the 5252 line, the HP number will look bigger - hence a HP engine.
You can run the same 1/4 mile number with a "torque" engine as with a "horsepower" engine (assuming you could make the raw average numbers the same).
This is why we can have cummins diesels in 4x4 trucks running low 10's in the quarter mile with only 300 peek HP.
The torque number is mostly dictated by the cubic inches, compression, and fuel - without too much you can do to change it (other than turning up the boost or adding nitrous to make the engine seem larger) - hence the reason why spinning it faster is really the only thing to do. You can't make more torque than the ci allows without boost, but you can spin it faster to make more horsepower.
Oh well, I thought this would be quick...