Yes!

and

No!

Confused yet?

Yes it is one giant server!

Yes there are multiple copies of Cyrodiil operating all at the same time and you can pick one to join while you are sitting inside of the pve area of the single mega server! (intentional run on sentence)

Im not entirely against custom rulesets but how far can we take this concept before it becomes a mess?

One campaign for rpers, one for non rpers, one for add-on users, one for non add-on users, one first person view campaign, one RP non add-on user first person view campaign, one French only non RP add-on users non first person view...

I can see where they had to limit the numbers in each PvP fight sequence, so the FPS wouldn't bottom out... Makes sense...

In any event, you can still have battles that easily have 100-200 people on the screen and it runs smooth as silk.