How can lots of ram (128 GB) be used to improve MySQL 5.5 index creation?
Your first concern is the data loading. Since you don't intend to have a primary key, but just an index, you should order your data before loading by the index column id1, in any UNIX flavor:

sort -n mytable.txt &gt; mytable.sort


For loading the data, use either mysqlimport of LOAD DATA from the MySQL prompt. To speed up the loading, MYISAM tables benefit from increasing *bulk_insert_buffer_size*, *myisam_sort_buffer_size* or *key_buffer_size*, for INNODB tables, increase *innodb_buffer_pool_size* and *innodb_log_file_size*. 

These increases might not be sufficient, and the loading still might slow down as the memory fills up. In that case, it is more efficient to load the data in chunks. You can monitor the speed by executing an hourly du in the mysql root directory:

#!/bin/bash
while [ 1 ]
do
    du -hs database/.
    sleep 3600
done


Just for completeness (not relevant for this specific case): Disabling indexes also helps speedup the loading process. 

Now to querying: 
This is a bit more complex, as it depends on your data, and the way you want to query your table. Biggest factors that influence performance are:


buffers: set by variables. Execute your typical queries and compare
the "show variables" and "show status" output to identify
bottlenecks.
indexes: you already covered that  
joins: Depending on the way you join with other tables, it might be
better to denormalize your table(s) in a data warehouse style,
especially if you want to join two large tables.


Great articles on data loading and large table query optimization can be found at:
http://www.mysqlperformanceblog.com/2007/05/24/predicting-how-long-data-load-would-take/
http://www.mysqlperformanceblog.com/2006/06/09/why-mysql-could-be-slow-with-large-tables/

Review the default and allowed values for these and other variables at:
http://dev.mysql.com/doc/refman/5.5/en/server-system-variables.html