IIRC, the configurable logic took the place of the CAMs in the routing table mainly. There's cool niches where FPGAs make sense due to their on the fly reconfigurability even more than a purpose designed asic would.
Do they really alter the images "on the fly" when traffic is flowing? Or do they have some situation where it's OK to stop traffic on their network interface for a short while?
Yeah, they do. They might drop a few packets during a partial reconfiguration if a stream is still in progress, but that's bound to happen anyway on routing changes.
