Of course it depends on how prolific the participants are, but in my experience, more than about 20-30 people makes a chat room useless to me. I can't keep up. Even if it's all signal and no noise.
On the other hand, I used to lurk in #day-traders on IRC and there'd often be well over 100 people, but only about 20 actively talking, which made it not too difficult to keep up.
In our implementation, we won't set any limits on the number of people in a room.
There are a lot of aspects of it to work out, once we just find software that can be tweaked to meet our specific needs.