this is to get rex off my back.

1001 is repeatedly used in haroun.  (i should have kept track while i was reading how many references there are) 

you might have heard the tales of sinbad, aladdin, and ali baba and the 40 thieves referred to as the arabian nights, but in arabic the tales are called alf laila wa lail or 1001 nights.  the back story of the 1001 nights is that there was once a king who took a wife only to kill her the next morning.  he repeats this practice until he marries scheherezad.  the clever queen comes up with a plan to save her life...one their wedding night tells the king a story, but she doesn't finish it and the king keeps her alive in order to hear the ending.  the next night she concludes her tale, but begins another one.  this goes on for 1,001 nights and her life was spared. 

when rushdie references the sacred collection of stories, i think that he is saying that stories save lives.  they saved scheherezad's life and they save haroun's world from despair.

also, the name of the caliph who ruled during the time scheherezad's stories were collected...haroun al-rashid