Dave,
The Galil gets a "LI" with the new positions every 16ms. That is how more than two axes are interpolated at a time. This is true even for circles which are a collection of very short lines strung together. This is also why fast communication between Mach and Galil is important. The newer 40XX series controls also have a different method available, but Mach still sends the new position data every 16ms. Try it, and look at the galildebug file that is created by the plugin to see how the communication takes place and the commands that are send to the Galil.
Cheers,
Kenny