I 3-boxed LOTRO. 3 PCs with software broadcasting. I used Multibox back then, but would use Octopus now.

You're right in that it is much more of a system hog, which warranted me getting the 3 boxes (which now run my 5-box WoW flawlessly). I wouldn't say that you need to go completely hardware, but a machine for each account would be ideal. Even with the scripting/macro limitation, I was able to down a lot of the Epic chapter content with only 3 (Guardian, Hunter, Minstrel).

Running a full group would've been a lot of fun, but WoW punched me and forced me to go back.