Linux 2.0 handles 256 aliases per device. Since Linux 2.0.31 there has been and continues to be a soft limit on the kernel table used to store the aliases. The limit is set to 256 at boot time. This limit may be changed by writing a new value in the file
/proc/sys/net/core/net_alias_max
But there is a small catch -- this new limit only becomes active when you set the first alias of a device. If there are already IP aliases on a network device, they will have to be unset. When there is no alias on a device, the table is deleted and it will be recreated with the new limit the next time you set the aliases.
Linuxconf handles all this for you and will unset some aliases before attempting to grow the table. Some messages are sent to the log explaining this.
So Linux can handle a lot of aliases.