I assumed 32 is the max limit but its 50.
http://msdn.microsoft.com/en-us/library/ms143432(SQL.90).aspx
50 instances on a stand-alone server for all SQL Server 2005 editions except for Workgroup Edition. Workgroup Edition supports a maximum of 16 instances.
SQL Server 2005 supports 25 instances on a failover cluster.
SQL DBA.