There is no known limit that I found.
I loaded a 2 GB San Disk SD card with 740 mp3 files and inserted it while the Reader was on. In less than 2 minutes the wait arrows faded and and the Audio section reported 740 songs. So far so good.
I then removed the card and added another 321 mp3s. After reinserting the Audio read 1,061 songs. To test if they would play, I played a sample of them. No problem in playing them. I then removed the card and deleted the files.
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