Ummm wow, my question is what if Wintergrasp becomes a success? Will there be server crashes all the time. Will guilds go battle it out and before people realize it there will be hundreds of players. Could lets say 3 to 5 hundred crash a world server all in one zone?

The way I understand it, the number of data packets required increases exponentially based on the number of players present...
Correct me if I'm wrong but:
If you have one player, you need 1 data packet for the environment. 1 packet
If you have 2 players, you need 1 data packet for the environment and one data packet of information on the other player, updated regularly, for each of the 2 players, 4 packets.
If you have 3 players, you need 1 data packet for the environment and 2 data packets on the other players for each of the 3 player, 9 packets.
If you have 1000 players, you need 1 data packet for the environment and 999 data packets on the other players for each of the 1000 players, 1 million data packets...
As you can see, since the number of data packets required increases exponentially, with the number of players you had I do not think a server anywhere would be stable once you start pvping, since when someone casts a spell it requires additional data packets to be sent out to all other players. And seeing as how pvp is often 1 instant cast spell followed by another, it could add up extremely quickly, bringing the server to it's knees... Possibly stressing the hardware enough to permanently damage it. Permanent damage = bad

There's no way to overload a server or a network to that point that hardware is physically damaged. Closest to "physical" damage might be overloading the file I/O and causing a file table to go bad, but still... zero out the drive, restore from a backup, and it's back to good.

the server sends and recives thousands of packets between just one player because some get lost in transaction so for smooth gameplay they have to ensure that nothing gets lost and that information transfers through perfectly so my shield bash doesn't hit a second too late, Blizzard's servers are amazing i assume and it's understandable that 800+ players crash their servers. Amazing idea guys hopefully you'll get to do it and finish it one day.

The Lag looked a little like this:
http://au.youtube.com/watch?v=cqEv8lBk1H8

alwaypwns: That is not exponential growth at all, it is quadratic growth (x^2 instead of 2^x). There is a difference:
1000^2 = 1000000,
2^1000 = billions and billions and billions of times more than there are elementary particles in the entire observable universe.

BRK can permanently damage my server any day he likes! :-)