The scripts are very capable of handling several hundred users. It may seem like they are not but they do run quite well for alot of sites and many of them are on single box configurations. I know adding more RAM or another server seems a drastic step for a forum but it's a problem many would like to have as 500+ users online at the same time is considered a very succesful forum. Not trying to sound defensive or make light of the situation, it's just a matter of with that number of users server upgrades are necessary especially on dynamic forums because of all ot the read/write access.
Some info on the questions I asked would have been helpful to pinpoint the problem to being memory related or cpu related because I'm always trying to improve things where I can. So if you can get any of this info to me I'd be most appreciative.