That many people crammed into a desert environment, I can only imagine that it would smell pretty bad!
There was an interesting thread over at Citizens of the Imperium (www.TravellerRPG.com) about ultra-high populations with a description of a plausible arcology structure that could fit the entire Earth's population into an area about the size of Florida, if I recall correctly. The structure would theoretically have enough farmland surrounding it and hydroponics within it to feed its inhabitants, and they'd be spaced at a distance such that travel between them would be practical.
The sticking point for me was water distribution, since you wouldn't get nearly enough rainfall across that surface area to support so many people. And assuming that the entire surface was covered in these things, you wouldn't be able to simply move water from elsewhere. There would need to be a very sophisticated water reclamation process, possibly paired with desalinization of seawater.
And of course, there's the matter of power, but since it's a Traveller forum, there was an assumption of cheap, abundant fusion energy.