The transmission contains several different gear ratios.
These gears provide mechanical advantage.
In low gears, like first gear, the engine completes relatively MORE revolutions for each revolution of a car tire. This means the car feels like it has lots of power and acceleration, but cannot go at high speed.
As one shifts into higher gears, the gear ratio changes. The engine produces relatively FEWER revolutions for each revolution of the tire. Therefore, the car feels like it has less power, but the car can travel at higher speed.
The easiest way to see this at work is with a bicycle that has multiple gears.
http://en.wikipedia.org/wiki/Transmission_(mechanics)
http://en.wikipedia.org/wiki/Gear_ratio