Am I understanding correctly that SSI is basically that?
Yes, though it depends on the implementation. MOSIX and OpenMOSIX are the most prominent and famous examples of an SSI system, so you should read a little about those. Note that OpenMOSIX is no longer supported which is why I chose OpenSSI.
the "machine" gets bigger as you add more nodes? Or is this just a clone type cluster?
does this work for a LAMP setup?
Yes and yes. Even the master node can go down and your cluster will be fine. The setup is fairly easy but every machine needs to have PXE (boot from ethernet) enabled.
any recommended links so I can read up?
http://openssi.org/http://www.mosix.org/I guess I am technically trying to build a grid-cluster.
Well, a cluster is a cluster - kind of. You're basically looking at either Beowulf (good for math stuff, not SSI, requires code specifically written for it), or Mosix/SSI. Most "cloud" hosting setups are basically an SSI image with a bunch of Xen nodes, since Xen is so extensible and widely hardware compatible.
I'm building the cluster not so much for reasons of failover (though that is a plus, I'm going to use NFS to combine every single disk in the cluster into a giant data warehouse), but more performance. I'm looking at aggressively expanding my spider operations and I need a beefy machine with plenty of horsepower that's able to make use of a ton of bandwidth (separate cable IP on a 24MB/s pipe).