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Modern ebook reading devices do not have a hard limit, unlike the sony readers.
However, it is never a good idea to have very large html files, as devices will still choke on them. There is no longer a hard limit, but as a rule of thumb, the old limit of 260K works well.
Most ebook files do not have large enough html files inside to cause an iPad problems, so you could probably get away with not doing the conversions. However, every once in a while you may come across a pathological epub.
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