Last I read, yes, it does need a CPU to feed it. Also, current CPUs can't feed the card fast enough. I think Nehalem will be a more suitable option for serious GPU folding with QPI and generally more horsepower. I still suspect it will be cheaper and more productive to just run the SMP client though, but time will tell.
People are experimenting with running multiple AMD cards but I don't think it is supported yet. Also, multiple GPUs are sharing the same bandwidth and the limited pool of CPU time so there are a lot of factors to think about. Welcome to high performance computing.
Also, more cards = more watts = more heat. Build and running costs are going to skyrocket. I predict (and I could be wrong, it depends on the points system) that in 18 months time people are still going to be folding on Quad CPUs with Linux VMs, albeit Nehalem variants which look like they are going to be 30-40% faster than the current chips. Only problem with Nehalem is that it's going to mean binning your motherboard and RAM as well.