I know this question is rather old, but things have evolved since 2009.
There are two things to take into account now: the number of cores, and the number of threads that can run within each core.
With Intel processors, the number of threads is defined by the Hyperthreading which is just 2 (when available). But Hyperthreading cuts your execution time by two, even when not using 2 threads! (i.e. 1 pipeline shared between two processes -- this is good when you have more processes, not so good otherwise. More cores are definitively better!)
On other processors you may have 2, 4, or even 8 threads. So if you have 8 cores each of which support 8 threads, you could have 64 processes running in parallel without context switching.
"No context switching" is obviously not true if you run with a standard operating system which will do context switching for all sorts of other things out of your control. But that's the main idea. Some OSes let you allocate processors so only your application has access/usage of said processor!
From my own experience, if you have a lot of I/O, multiple threads is good. If you have very heavy memory intensive work (read source 1, read source 2, fast computation, write) then having more threads doesn't help. Again, this depends on how much data you read/write simultaneously (i.e. if you use SSE 4.2 and read 256 bits values, that stops all threads in their step... in other words, 1 thread is probably a lot easier to implement and probably nearly as speedy if not actually faster. This will depend on your process & memory architecture, some advanced servers manage separate memory ranges for separate cores so separate threads will be faster assuming your data is properly filed... which is why, on some architectures, 4 processes will run faster than 1 process with 4 threads.)