UPDATE - 03/08/10

Statement from Newegg:

Newegg is currently conducting a thorough investigation surrounding recent shipments of questionable Intel Core i7-920 CPUs purchased from Newegg.com. Initial information we received from our supplier, IPEX, stated that they had mistakenly shipped us "demo units." We have since come to discover the CPUs were counterfeit and are terminating our relationship with this supplier. Contrary to any speculation, D&H Distributing is not the vendor that supplied us with the Intel Core i7-920 CPUs in question.

Newegg’s top priority is to proactively reach out to all customers who may have been affected to ensure their absolute satisfaction. We have already sent out a number of replacement units and are doing everything in our power to resolve the matter promptly and with the least amount of inconvenience to our customers. We have always taken pride in providing an exceptional experience for each customer, and we apologize for any inconvenience to our valued customers. We take matters like this extremely seriously, and are working in close cooperation with Intel and the appropriate law enforcement authorities to thoroughly investigate this incident.

Updated article from HardOCP.

After talking to several sources on this, it seems that Newegg was in fact selling counterfeit Intel processors.

A fake Intel Core i7-920 was delivered to the hands of HardForum user Vincent Waller in Oregon, AKA "Nix." He reported his find to other HardForum users Thursday afternoon.

From the pictures below, supplied by Vincent, you can see that someone did a fairly good job of hiding the obviousness of what was being traded off as a genuine Intel processor.