Small links still count but less value. You're right, it's better to get backlinks from a high PR site than to have a ton of backlinks in a small site.
There's no limit. Think about this for a second - a website announces a cure for cancer, how many links do you think they'd pick up in one day - millions. What you should be more concerned about above quantity is quality. If you go out and pick up 1000 crappy directory links in a week, then it's going to be pretty obvious that somethings not natural about that. Chances are most of them would get discounted. If you're carful to get links from diverse sources and concentrate on keeping them topical, where possible in content and from good sites then you won't go too far wrong.
Directory submission is still important though is it not? How do you go about getting decent PR links from other sites? I know recip linking etc, but not many seem willing to do this. Is it worth paying for PR links? In directories etc?
My advice: Do not worry about the amount of links you gather per day (some say 10,15,50), the thing is, the major factor is if they come in because you have social bookmarked the website (digg/stumble) and you're getting natural links from regular sites, it's all fine by google. We can put the problem, so you can understand better this way, imagine an internet blackhat mogul, lunching a new website to promote weight loss pills, and he has 1500 blogs using rss2post about weight loss and they all point to his website in a matter of minutes, now that's fishy huh? or submitting to link farming sites, such as http://whatever.com/weightloss1.html linked weightloss2.html linked weightloss3.html linked. That's a problem right? Google's algorithm is complex and that's why nobody can figure it with a 100% accuracy. As a conclusion: Do whatever it takes to get good, natural, links - stay away from link farming sites, bad neibourghoods and BlackHat SEO techniques. - Scorpiono