If it was possible in 2002-2004, I am not impressed that it is still possible in 2011.
One of the optimizations was to reduce the per-connection TCP buffers (net.ipv4.tcp_{mem,rmem,wmem}) to only allocate one physical memory page (4kB) per client, so that one million concurrent TCP connections would only need 4GB RAM. His machine had barely more than 4GB RAM (6 or 8? can't remember), which was a lot of RAM at the time.
I cannot find a link to my story though...