I guess this is how they manage SSH connection to Pleiades [1]. Cool! I use Pleiades and am constantly impressed by the uptime and quality of service on such a high-end resource.
When you have enough users, and NFS homedirs, it makes sense.
The University of Waterloo just uses DNS round-robin, but that's not particularly reliable since the load balancing is up to the whims of each client's DNS client implementation.
And then there's software like mosh[0], which, IIRC, does round-robin on the first connection but then sticks to the same server afterwards so that you can e.g. connect to the same pty even if your local IP changed.
> The University of Waterloo just uses DNS round-robin
I take it that they do not allow running persistent applications? I personally would not like to find my screen/tmux session "disappear" after reconnect because I ended to another host.
My University did something that seems similar. There was a group hostname which I believe dropped you into one of a group of linux machines(with nfs homedir) but you cold always specify the actual hostname of the computer where you parked tmux.
[1] http://www.nas.nasa.gov/hecc/resources/pleiades.html