What is oversubscription?When selecting a 16 port 10 gig blade for cisco 6500 , it says oversubscription as 4:1. What will happen if I populate all 16 ports, will some ports be blocking or dropping packet?
It sounds like you're talking about the WS-X6716-10GE. Over-subscription in this context means you have a 16 x 10GE ports on the front of the LC and no more than 4x10GE at the fabric connection to the rest of the chassis.
Over-subscription will not matter if you locally switch traffic within the same linecard; however, you will only be able to send up to your fabric connection (i.e. 40Gbps) to other linecards in the same chassis. So it's possible to get blocking or drops if your links congest the fabric connections.
In addition to @Mike's answer, the following Cisco webpages provide some context into the Cat65k fabric architecture:
Oversubscription happens when your network does not have the capacity to handle the traffic if all devices start sending at maximum speed.
In many cases this is not a problem, and it is very common in networking and many other areas. When running virtual machines, the host does not have all CPU, RAM and disk storage promised to its guests. Airlines and hotel owners are also well known to overbook.
When you oversubscribe, you save money, but take the risk of having capacity problems when there is a usage peak. You should consider how much and where to oversubscribe in your network design. And always keep an eye on the meters to spot trends that require adding extra capacity to prevent structural performance issues.