They recommend at least 2 MB for a 3.2 install. Also, icon.library and workbench.library have been pulled from the kickstart to free up space for other stuff... so these should be copied to libs: beforehand (the install will probably do this itself; I had to do it manually myself for several different reasons).
It should work with both kickstart 3.1, 3.1.4 and 3.2, however.
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