Since the summer of 2010, Blinkenshell is based on one big physical server with lots of different virtual machines on it, and some additional virtual servers hosted at remote sites.
The main server has virtual machines for: storage (NFS), directory service (Kerberos/LDAP), web, mail, SSH/shell, firewall and monitoring. All accounts are stored on the central directory service, and can be accessed from any of the other servers. The storage server hosts the home directories and shares them via NFS, so these can also be accessed from any server.
Having different virtual machines for each service allows for increased security because of the separation, and increased uptime because upgrading one server will not affect the other services.
The main server is a Xeon X3440, with 8 GB of ECC RAM and a RAID-Z (RAID5) for storage.