Homebrew covers that, but AFAIK the term originated with the 1980s micros like the Spectrum/Amstrad/Commodore et al, which had built in programming languages. These allowed allowed amateur developers to make their own games and distribute them on inexpensive media (mostly cassettes) via word of mouth or magazine/fanzine classifieds.

Of course having read the Wikipedia article now I'm doubting myself, but I'll stick by this and cross my fingers no one decides to rain down righteous fury upon me.

Link above gives a little more insight, they're using RHEL on blades with a mixture of CPUs, but at the highest end they're using 16-core sandy bridge.

After a quick skim it doesn't really answer this question, but this article (linked in TFA) has more info on the Dreamworks infrastructure and more vague-but-exciting-sounding statistics.