People used to think that the search engines, including Google can never crawl more than 100 links on a single document. It was an ALLEGORY!
But the nitty-gritty is that now the search engines can and do crawl more than 100 links on a single document or web-page!
Yes, according to the Official Webmaster Guidelines page, it is recommended that one should keep it under 100 links per document as a document with more than 100 links can be highly oppressive for any user! It is also recommended that one should keep the navigational options as less as possible to make your document user friendly.
"Offer a site map to your users with links that point to the important parts of your site. If the site map is larger than 100 or so links, you may want to break the site map into separate pages."
"Keep the links on a given page to a reasonable number (fewer than 100)." – Google Guidelines
We have a Googler, who confirmed the news. He said:
Just for the record, we can process more than 100 links per page . We do however recommend the limit of 100 because it generally makes sense for users (and search engines). -JohnMu