Lets say you have some "micro mega trees" in your display (18 inch tall with 8 legs of 10 RGB nodes each) or whatever other decorative element you want. The key here is that you have some number over 16 of them.
In this case, each micro tree has 80 nodes, or 240 channels. Lets say you have 17 of these that you want to run in your display (240*17<4096). Normally you'd need 2 Hubs to do this. With the passive hub you can run pixel net to the main hub, output to 15 SSRs and to the passive hub, then output from the passive hub to 2 more SSRs. You now have 17 elements and only had to spend another $8 for a passive hub rather than $65 for another main hub plus more for another ATX. You can also run it all off the single power supply (assuming you have the amperage), you just need to shunt an spt2 line alongside the cat5 running from the ATX/main hub enclosure to the passive hub.
Each bullb on every micro tree (or whatever) can still be programmed individually. Remember, the bulb channel numbers are set in the SSRs, not the hubs.
You would use the passive hub anywhere you wanted more than 16 individual items in your display that were separated by an inconvenient distance to run as single RGB node string to multiple elements. This keeps you from having to splice in extra cable between micro tree 1 and 2 for instance in order to have the bulbs on both trees attached to a single line. The down side of this, is that in addition to the passive hub, and power line, you need an additional SSR to power the new string which cuts back on your savings.
I'm not sure, but I believe that the ethernet dongle (when available) and the Lynx combiner will allow the full 16000+ channels to be sent to a single main hub. If that's true, you could use a midrange ATX ($40) to power the hub, push 9 passive hubs out of it along with 6 128 node strings, each passive hub would be powered by a 20 amp DC power supply (sold by Ray Wu for about $13 ea) running a grand total of 42 SSRs - each with 128 node strings attached (mzx allowed in a single pixel net universe). The distribution system for this setup would cost about $300 (1 hub, 9 passive hubs, 9 20amp DC power supplies, 1 midrange ATX) To do the same without the passive hubs would require at least 3 hubs and 3 very high end power supplies (70 amp) and would cost upwards $600. The passive method would also distribute the power requirements over more and less expensive devices. Hardware redundancy would therefore be significantly less expensive (spare power supplies/hubs/passive hubs) than the old method.
Someone jump on me if I'm wrong on any of this.