The character limit discussed is on the rtf that sony will automatically make if you tell it to export the notes from the pdf--not on any ability to view your highlights, or print them. If you make any annotations (including not just highlights, but also physically writing on the page), you can view them on your computer using the sony software when you attach your reader. From there you can easily print physical copies containing your notes (I've actually only done this once, and it was with physical writing by me on the page, rather than highlights, but it worked quite simply), if you want to store them with other physical work.
I agree that it would be nice if Sony could automatically export highlights for easy quotation in papers, however I've found that highlighting a pdf, viewing it in the reader and c/p'ing any text I want to quote works well, as the software will quickly take you to the highlighted pages of your pdf so you can see the material you'd planned on quoting.
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