This Wiki page discusses best practices regarding row limits for external lists, a functionality of Business Connectivity Services (BCS). 

Keep in mind two important limits:

  1. The default Max is 2,000 items.
  2. The absolute Max is 25,000 items.

Please see this link for more information: http://msdn.microsoft.com/en-us/library/hh144965.aspx

You should always define filters (it can be limit/comparison/wildcard filter) so that you can narrow your search and overcome others restrictions regarding a count of rows in the database. Especially when working with high volume of items, there might be cases in which you may have millions of items to pick, the bcs picker will show up to 200 items (this is a SharePoint restriction).

This info was taken from forum discussion: http://social.technet.microsoft.com/Forums/en-US/sharepoint2010general/thread/9dba356c-65f3-49be-a452-6934baee7216

Note: Also check out the SharePoint 2010 Best Practice Overview page at http://social.technet.microsoft.com/wiki/contents/articles/8666.sharepoint-2010-best-practices-en.aspx