On xbox for example, how will dungeons work? What is stopping 30 people from going into the same dungeon? I'm not terribly familiar with MMOs.

There are two types of dungeons. Instanced (only people in your group will be inside of it with you, maximum of 4), and public (anyone can go in, regardless of groups).

Realistically, public areas will also be instanced (max 150-250 people is pretty standard) just to keep rendering speeds up and to keep folks from absolutely overrunning the local resources (be it actual resources or enemies to fight). Witht ehmega-servers this is absolutely necessary, as you really don't want thousands of people on screen all at once. Graphics go kersplat at that point, and you get hit with the hammer that every one of those slowly moving blurs is also a 'Chosen One.'

Thanks for the info. Well as you can see from my sig, i love smithing and i was concerned about how i would need to compete for resources.

Oh you'll be competing for resources. Nodes are not phased for individuals.

Also no matter what instance you are in that instance will have a cap on it, so if the cap is say 4000 players that would mean that if 5 million are playing on the mega server you will only see 4000 of them.