When eshell runs a pipeline of external programs, does it fork+exec them all in parallel and connect them with the requisite file descriptors? Or does it run each program sequentially, grabbing its output in its entirety before passing it onto the next program in the pipeline?

I thought it was the latter (but it's been a while since I looked at it).

Tcl's exec gets it right. R Keene's pipethread extension for tcl gets it even more right.

Just perusing the schemesh docs (haven't tried it yet), it looks like he got it right, as well