Question about web services...

I've always wondered what happens when a web service(the function) is called. Let's say I have a web method called sayHello() which returns a string. What happens when more than one client calls the method at the same time. Does a multi-threaded thing occurs(in the server side) where two instances of the method are run at the same time? Or is it more like a multiple process where a separate process(on the server side) is created for each client? Or does each client wait till the other client is finished?