Hi,

Am I correct in thinking that all load-balancing and forwarding decisions are made in hardware   ---- Yes. The load-balancing of the packet in etherchannel is depends upon how you conifgured that based on that the switch will to do loadbalancing.

There is 6 method to do loadbalance of the packet in the etherchannel link,

port-channel load-balance {dst-ip | dst-mac | src-dst-ip |       src-dst-mac | src-ip | src-mac}

Depends upon your need to can configure etherchannel load balance.i.e) if you have multiple source and single destination then you can use src-ip or src-mac

If you have multiple destination then this scenario we can use dst-mac.

when the traffic is coming to the switch,based on our etherchannel config, the mac/ip address will convert into binary and the switch will  send the traffic over multiple links.

for more information , have a look into this below url

http://www.cisco.com/en/US/docs/switches/lan/catalyst3560/software/release/12.1_19_ea1/configuration/guide/swethchl.html

http://www.cisco.com/en/US/tech/tk389/tk213/technologies_tech_note09186a0080094714.shtml#catalyst

Regards

Karuppu

You are correct its completly hardware based and will not cause any effect on the performance of the device. Just keep in mind the load balancing is never per packet based so its not equal load balance. it could be on the basis of sr/dest mac or ip add.

HTH

Varun