We are in the process of Restructuring out Infrastructure so at the moment we only have half our servers running so each one has nearly 900 users on and the CPU is only at 10%. They are dell Poweredge 2850's with Dual Xeon 3.2GHz processors and 4gb ram, not blistering specs but I thought it would struggle more than it is doing so.

Whats the most users you have on a single BES or lowest Spec BES in your setup

From my understanding, you reach saturation and all hell break loose when you hit 2000 users on a single BES.

Those specs are very good, I would guess that if you are running on remote SQL you could come very close to the 2000 user hard cap.

Way better than a P3 with 512MB anyway.