Earlier quoted context omitted.
> Clearly you'll have tons of collisions with that solution Why? If we assume the hash code assignment to one of the 2^32 people is uniformly random from a set of 2^160 codes, the odds of finding a collision are astronomically small (order of 2^-95 or so). Am I missing something?
You are not taking the entire hash, you are only taking the first 33 bits of the hash. Since there are only about 8.5 billion different values for the 33 bits and there are about 7 billion people, the odds are astronomically low that each of those 7 billion people will receive a different one of those 8.5 billion possibilities. This is the birthday paradox with instead of 365 days you have 2^33 possible answer values…
Right, my bad, didn't pay attention to the problem we are trying to solve :)