First of all, you need to patch and recompile the kernel. (or, you can just install the precompiled kernel RPM).
If you want to use 32-bit UIDs in the filesystem, you'll need to make sure that the "ext32" filesystem is configured in.
You can configure it as a module if you like.

After booting, it should work identically to your old kernel (if not, then something is probably broken and you should tell me about it).

Next, you must upgrade your glibc so that your old binaries will be 32-bit UID aware. Use the  patches  and recompile glibc while you are running the new kernel. Or, use the glibc binary RPMs.

You should now be able to 'su' to a UID >65535!!

If you want to be able to own files with high UIDs on disk, you need to mount the appropriate disk partition with the "ext32" filesystem (you did remember to select that option, right??)

You can simply change your /etc/fstab to look like this:

/dev/hdb4               /home                   ext32    defaults       1 2

Now you can chown files and directories to high UIDs as well! (if you're paranoid about losing data, you can keep some partitions mounted in 16-bit UID mode with the ext2 driver and others mounted with 32-bit UIDs using the ext32 driver)

Comments
 

- I've had some problems getting things to work properly with huge passwd files. Logging in and changing passwords seem to choke on my big file. (approx. 90,000 entries)
This could just be a problem with the password utilities in general. I'm using Linux-PAM.

- Things seem to work for a small number of users, but including some with high UIDs

- I haven't tested everything in the kernel yet (all possible drivers). Sound and networking work, at least. Some of the filesystem drivers aren't yet patched for ideal behavior with high UIDs. (ufs, sysvfs, ...)

- PRECOMPILED KERNEL MODULES WILL NOT WORK WITH THE MODIFIED KERNEL!!
Don't even think about using OSS, Transarc's AFS, etc... they shouldn't load and if they do, they will probably crash.
Instead, repeat after me: "A free operating system requires free drivers..."

Naturally, you shouldn't expect that software downloaded for free off a random web page would carry any sort of warranty? Not only do I make no guarantees, but I have a warning:

THIS SOFTWARE IS PROVIDED AS IS, WITH NO WARRANTY, IMPLIED OR OTHERWISE. (WITHOUT EVEN THE IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE). YOU WILL NOT GET ANY SUPPORT FROM OTHER LINUX KERNEL HACKERS OR LINUX SYSTEM DISTRIBUTORS IF YOU USE IT. YOU SHOULD NOT INSTALL THIS SOFTWARE ON ANY MACHINE WHICH YOU ARE NOT WILLING TO CRASH OR LOSE DATA ON. THIS SOFTWARE IS GUARANTEED TO BE INCOMPATIBLE WITH PRESENT OR FUTURE VERSIONS OF LINUX.

But aside from all that, it seems to work fine.