Close, but not quite right.  The maximum number of loopback 
interfaces will be limited by the maximum number of interface 
descriptor blocks (IDBs) on a given platform and IOS version.  
You may want to bookmark this web page, because it is a fairly 
good snapshot of most of the platforms out there:

http://www.cisco.com/warp/public/63/idb_limit.html

So you may be asking why the field value is set to such a high 
number as 2 raised to the 31st power, or 2147483647?  If you 
think about it, the upper limit may change in future versions 
of the IOS to conform with a future/need/capability.  As memory 
capabilities grow, the software is already capable of providing 
this capability.

HTH,

Paul Werner

> As per your query regarding loopback interfaces.I have found 
some
> suitable
> info for your loopback interfaces.
> 
> The answer to your question 1 is that you can create more 
than 2
> loopback
> interfaces.Infact the the total number of loopback interfaces 
that can
> be
> created is from 0-0-2147483647

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