The new, larger regions enabled by varregions have been tested successfully on the grid overnight. These are possible following the upgrade to OpenSim 0.8 (release).
There is currently a 1024x1024 1280x1280 test region called Rheged at 2000, 2000, i.e. four five times bigger in x,y coordinates and thus a square area 16 25 times bigger than the default 256x256 regions inherited from Second Life™.
Larger regions take longer to load in the viewer. We tested a region at the maximum size of 8192x8192 (32*32=1024) but it crashed the simulator both times we tried it, perhaps because it consumed too much memory in start-up; however, 4096x4096 (16*16=256) worked successfully before we downsized it back to 1024x1024 (4*4=16), later increased to 1280x1280 (5*5=25) in order to be able to upload the Mars Var25 1280x1280 terrain.
Currently, such regions must be square and require the BulletSim physics engine, not the older Open Dynamics Engine (ODE). It is possible to load OAR archives from normal-sized regions by offsetting them to the correct location but it is not currently possible to do the same with terrain files.
Varregions were ported from code originally developed for the moribund or possibly defunct Aurora-Sim project, a fork of OpenSim whose web site has recently become unavailable at the time of writing: the code is still available on GitHub. Aurora-Sim has now been replaced by its own, more recent fork WhiteCore. A wide range of other features including underwater and centred gravity physics, safe scripting of C# and VB script, "Display Names" etc have not been ported to OpenSim.