What is the practical limitation of no multi-threading?

OK I admit it, I am a postgresql newbie.  The developers FAQ says the
postgresql "backend" is not multi-threaded.  How serious is this?

If this means only one transaction at a time can make progress or the
entire DBMS server is blocked on every disk I/O then that is very bad.

But if every connection gets its own backend, and the backends can run
in parallel then not being multithreaded is no big deal.

Here is the bottom line.  Our app runs on multiple machines (we call
them sinks)
hitting one DBMS server for data.  We expect the sinks to be able to all
make
progress at the same time.  Each sink fetchs some data, goes compute
bound
for .2 to .4 seconds, and then sends a bunch of INSERT/UPDATE/DELETE
to the DBMS.  Will our sinks be able to run concurrently?

Thanks,
Brian Beuning