The Unique IDs to Assign per IP is for recent visitors. When PNTF (Recent Visitors) gets a user, it tracks by IP, and assigns them an ID string for tracking (something like iZqbTHkprwQ). That Unique IDs setting controls how many of those ID strings can be assigned to a particular IP.
For example, some proxy servers hop you around IPs while you surf, so it is possible that you get a new session on the same IP. A prime example of this happened on my boards recently.
I looked at my PNTF, and saw "SubZero, Hotwire, and 19 guests", so I thought I was getting crawled. Turns out that the other user was on a Proxy that was rotating him between 5 IP addresses, and he was showing up 20 times in PNTF(5 IP adddresses x 4 times per IP).
