[blykins]

The way it was explained to me (and it makes sense using a model of a combustion engine and some heat transfer), based on a hp standpoint, cast iron heads make more horsepower....in a combustion engine, you want a really cold intake charge and a hot combustion.....the bigger differential between these two, the more hp you make. Aluminum dissipates heat better, so the combustion is not that hot. I'd say the difference is hp is made up by the difference in weight however.

But like the other guys said, with aluminum heads you can run a little bit more compression. Probably for the same reason as above. It dissipates heat, so it keeps the mixture from pre-igniting.