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Sounds like they are using Virtuilization. The new VMware ESX allows this, growth on demand, you can take a series of ESX servers and cluster CPU power and allocate multiple CPU's to a Virtual Machine and cluster it over several machines.
Example.
Vmware ESX you can load it on say 10 servers making 20 processors total for capacity if they are dual processor systems.
Vm ESX can create a cluster and you can allocate say 15 CPU's to a customer for 15Ghz if each processor is 1ghz in size.
You can do the same with ram ect.
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