Well, I did some googling, and it seems the Altix ICE is in fact a cluster machine; each blade has a quad-core Xeon, 16 blades per blade enclosure, and 4 blade enclosures per rack. This would take 40 racks for 20480 cores.. the whole thing would be connected with Infiniband. However, it does appear each blade will be booting an individual copy of Linux with this setup (booting via Infiniband) and all storage done to Infiniband-connected storage. So it really will be running 5120 copies of Linux, each handling 4 cores and 32GB of RAM. OTHER machines in the Altix line are large shared-system-image systems though, with 512 cores running under a single kernel not being too unusual.
Linux doesn't really suffer from it's historical roots.. I'd say Linux scaled to 4 CPUs through roughly the 2.2 kernel. It seems 2.4 would scale to 128 or so pretty well. SGI did research and kernel improvements to improve scalability. The 2.6 kernel has an improved scheduler that keeps a given thread on the same CPU (to maximize cache hit rate). NUMA (non-uniform memory access) is handled intelligently so the system doesn't bog down from having some memory faster than the rest. 2.4 had one "big kernel lock", 2.6 has the minimum locking required to avoid any general cockups. And most importantly, the scheduler in 2.6 is O(1), so scheduler overhead doesn't increase with number of CPUs or processes. SGI scaled 2.6 to 512 cores fine. For 1024 cores, they had to just enlarge an in-kernel table or two. The largest singile system image system in the world is also at NASA, with 1024 dual-core Itanium2s (2048-core single system!) This is also an SGI Altix, but a shared-memory model instead of Infiniband cluster model. It seems to go from 1024 to 2048 cores, SGI just had to enlarge some kernel tables again, and it ran fine.
Amdahl's law definitely applies.. and applies even more with a cluster. But I think the kind of code NASA runs in fact will be heavily parallelizable. Apparently each infiniband channel does 20gbits/sec, so hopefully that's enough to keep those processors well-fed.