Here is the Apple Tech Note on volume sizes: http://support.apple.com/kb/TA27115
However, it's worth noting that even System 7.5.3's installer appears to use signed 32bit quantities when doing volume size checks. As a result, it won't actually let you install on volumes >2GB despite being able to create and otherwise use >2GB. System 7.6's installer will allow you to install, although it seems to only recognize any volume >2GB as 2GB exactly.
Other installers and software may do something similar, so I've simply created a 2GB boot volume, installed on that, and left the rest for data.
However, it's worth noting that even System 7.5.3's installer appears to use signed 32bit quantities when doing volume size checks. As a result, it won't actually let you install on volumes >2GB despite being able to create and otherwise use >2GB. System 7.6's installer will allow you to install, although it seems to only recognize any volume >2GB as 2GB exactly.
Other installers and software may do something similar, so I've simply created a 2GB boot volume, installed on that, and left the rest for data.