Nilrem don't forget that servers don't pass data across, they have to handle all of those systems - because a system can handle 256 connections doesn't mean it can handle 256 players.
i think even my Dual Optiron machine with an OC/255 would have a huge problem handling that many players. Most you can really load most standard servers with is around 128 before your latency gets too great.
that aside, most of the bigboys as Ian put it actually only ever use 64connections per server box and have a professional setup server with stacks of around 20 per box, most of them then have around 16boxes per large server room.
although its connected all upto the same Harddisk stack for all 20 of those machines, the actual machines themselves are nothing more than simply motherboard w/cpus as workstations of yaw were like
there are a few companies that lease these servers for about $120/year - it is quite expensive to keep these machine running and maintained... for seriously large games a standard home computer just doesn't cut it far too much overhead on windows, and if you have say 4machines each running a seperate server proxy then that is still 4 version of windows which could go wrong each with thier own overhead and connection overhead.
you'd be surprised at just how much overhead it takes to run an OS on each machine and then proxy it out.

try to remember that the servers must calculate every players position and select what data they send back, because although an OC/48 connection could handle in theory 256 players all with thier own positions, items, stats, chattext etc...
just because the actual netcode being sent is only a matter of say 1-200bytes when you have 255 players that multiples to 4mb-ish
4,000*8=16mbit
which is actually far more than standard home connections can handle
you add that with the fact that if it takes alot to process the collision of your machine with others and send it about (apart from the fact that i don't think that would be feasibly possible) there would be an aweful lot of data that its sent to figure out collision, chat, items, etc... when it doesn't even need to use it at all.
most games use an
information-on-demand routine which basically means that the server takes care of the knowhow of all the positions and essentials which should only be a few floats - but when it comes to item menus and such which are larger amounts of data it is only on the request of a client machine
the idea is to get the server doing AS MUSH as physically possible, so that you can ease up the bandwidth use and more importantly leave more power on the end-users computer to focus on the connection mainatinance, as it does take alot of processing power with the exception of hardware modems (which most Broadband connections arn't)
this however does put alot of strain on the processing of the server which means that you can only physically host a smaller amount of people ... most games try to get a good blend of both doing the data, and alot of the time you have to make a tough decision between realtime and just randomised data to subside the latencies.

trust me there is alot more to MMO games than just the network speed and connections - if anyone can get 255 connections working in realtime on thier machine you will have my respect and admiration because to be perfectly honest i don't think it is possible without making the lag to great to the other users (remember that each users conneciton speeds arn't just thier problem but everyones because the Server awaits the data from that particular user, else it becomes biased to fast connections and people complain ... ALOT)
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