<p>Short version: I'm wondering if it's possible, and how best, to utilise CPU specific
instructions within a DLL?</p>

<p>Slightly longer version:
When downloading (32bit) DLLs from, say, Microsoft it seems that one size fits all processors.</p>

<p>Does this mean that they are strictly built for the lowest common denominator (ie. the
minimum platform supported by the OS)?
Or is there some technique that is used to export a single interface within the DLL but utilise
CPU specific code behind the scenes to get optimal performance? And if so, how is it done?</p>

The DLL is expected to work on every computer WIN32 runs on, so you are stuck to the i386 instruction set in general. There is no official method of exposing functionality/code for specific instruction sets. You have to do it by hand and transparently.
The technique used basically is as follows:
 - determine CPU features like MMX, SSE in runtime
 - if they are present, use them, if not, have fallback code ready
Because you cannot let your compiler optimise for anything else than i386, you will have to write the code using the specific instruction sets in inline assembler. I don't know if there are higher-language toolkits for this. Determining the CPU features is straight forward, but could also need to be done in assembler.