Tom is right. Although Photosynth *uploads* the full resolution photos to the site, it only matches them based on 1.5 or 2 megapixel versions of the photos.
Once uploaded, the full photos have been converted to Microsoft Seadragon's Deep Zoom Image format, so it doesn't matter how big they are, they'll all load on demand at the same speed. In other words it only loads as much of each photo as currently is displayed on your screen at the time. Once you zoom in to smaller details it will load those parts and so on, so essentially there's no such thing as an image that's too big.
Using 1000 images just takes a more powerful computer to succeed and as Tom said, takes a lot more time to complete. The complexity grows exponentially so using double the photos takes more than twice as long to process. Since not everyone's machine is capable of completing a big synth, it's advised against.