We discuss two qualities of quantum systems: various correlations existing between their subsystems and the distinguishability of different quantum states. This is then applied to analysing quantum information processing. While quantum correlations, or entanglement, are clearly of paramount importance for efficient pure state manipulations, mixed states present a much richer arena and reveal a more subtle interplay between correlations and distinguishability. The current work explores a number of issues related with identifying the important ingredients needed for quantum information processing. We (...) discuss the Deutsch-Jozsa algorithm, the Shor algorithm, the Grover algorithm and the power of a single qubit class of algorithms. In the latter, a quantity called discord is seen to be more important than entanglement. One section is dedicated to cluster states where entanglement is crucial, but its precise role is highly counter-intuitive. Here we see that the notion of distinguishability becomes a more useful concept. (shrink)