Depends on the language I'm sure. Compiling C++ is definitely not I/O bound. I have a 14-core build system that achieves approx linear scaling speedup over my dual core laptop.

Not at all; I've seen parallel builds remain CPU-bound on 72-way and 144-way systems.

The biggest bottleneck tends to be linking steps and other serialized items. (And those are getting better too; gcc's current linker supports parallelization using -j, integrated with make.)