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Yeap, i got that one too a couple of months ago! VERY interesting, even though it's a bit too the extreme if you ask me. I would rather use small 512's.
Still, awesome tut and I recommend it!
Would you simply break the textures up into various "categories"? So perhaps a window or two on one 512, a door on another (256x512), etc
I've always wanted to use the method in the video but I could never figure out the whole scale/grid aspect of it. After watching and see how simple it is, it'd be great to see a more in-depth video going over modularity in games. Maybe Eat3d has something in the works.