Today I stopped by the IBM offices in Burnaby for a demo of their blade server systems. A blade rack is essentially a big box that holds a bunch of servers and drives.
The enclosure holds the standard parts like power supplies, and is smartly designed to keep all the servers and drives in it alive and available through robust and automatic recovery, eliminating single sources of potential failure. If one of the power supplies fails, the others keep going, so you can just yank it out and replace it without any servers going down. Nearly everything is hot-swappable, even the server plades themselves.
I'll describe this all a bit more when I get to my computer.