Link to related discussion:

http://news.ycombinator.com/item?id=1429628

Does anyone understand if this is a bunch of CPUs that are 'virtualized' to look like separate systems, or is it a 512 way SMT machine?

From what I got, it virtualizes everything but CPUs and memory. Each Atom sees virtualized network connections, disk storage and whatever else the custom chipset wants to present. I am not sure if you can make the 8 Atoms on each board see each other as it they were an 8-way SMP box, but I am quite sure you can't make them believe they are a single-image, 512-processor machine.

From what I understood, they'd appear to be separate systems.

The whole point of their custom silicon was to share certain resources between the various CPUs as systems. If it were the equivalent of, say, a 2-CPU motherboard, none of that would have been necessary since they don't each expect their own I/O coprocessors, memory banks, etc.

Yes, e.g. each core sees 4 virtual SATA drives; the box itself can house 64 real drives in the front.

I don't think it could support it could support SMP since it would require on chip support, which isn't there now.

Also, the cache coherence traffic/noise at 512 cpus would be serious problem anyway.