Source: HalfLife-2.nl
Source: Frontline Message Board
Damn that is a lot of players. For that amount you will need a very powerfull system. Like a dual xeon for a server.

While the engine is setup to handle 256 players (was only 64 in HL1), I don't think you'd be successful running that many, you might be fine running 128, you'd have to test it. The reason is CPU and bandwidth. With a single server handling all of the transactions at the speed at which they need to happen, there may just simply not be enough horsepower to handle that many players.

Rick
Valve