Yup, it’s true… For performance reasons, likely valid, the Site Map provider in Sharepoint 2010 is limited to 50.
http://msdn.microsoft.com/en-us/library/microsoft.sharepoint.publishing.navigation.portalsitemapprovider.dynamicchildlimit.aspx
I found a fix for this in Sharepoint 2007 that still works for 2010. The following will allow unlimited dynamic navigation items to be shown.
1. Edit the web config for your application.
2. Find the <sitemap> section
3. Add the text DynamicChildLimit=”0″ to each of the following keys.
<add name=”GlobalNavSiteMapProvider” description=”CMS provider for Global navigation” type=”Microsoft.SharePoint.Publishing.Navigation.PortalSiteMapProvider, Microsoft.SharePoint.Publishing, Version=14.0.0.0, Culture=neutral, PublicKeyToken=71e9bce111e9429c” NavigationType=”Global” EncodeOutput=”true” DynamicChildLimit=”0″/>
<add name=”CombinedNavSiteMapProvider” description=”CMS provider for Combined navigation” type=”Microsoft.SharePoint.Publishing.Navigation.PortalSiteMapProvider, Microsoft.SharePoint.Publishing, Version=14.0.0.0, Culture=neutral, PublicKeyToken=71e9bce111e9429c” NavigationType=”Combined” EncodeOutput=”true” DynamicChildLimit=”0″/>
<add name=”CurrentNavSiteMapProvider” description=”CMS provider for Current navigation” type=”Microsoft.SharePoint.Publishing.Navigation.PortalSiteMapProvider, Microsoft.SharePoint.Publishing, Version=14.0.0.0, Culture=neutral, PublicKeyToken=71e9bce111e9429c” NavigationType=”Current” EncodeOutput=”true” DynamicChildLimit=”0″/>
<add name=”CurrentNavSiteMapProviderNoEncode” description=”CMS provider for Current navigation, no encoding of output” type=”Microsoft.SharePoint.Publishing.Navigation.PortalSiteMapProvider, Microsoft.SharePoint.Publishing, Version=14.0.0.0, Culture=neutral, PublicKeyToken=71e9bce111e9429c” NavigationType=”Current” EncodeOutput=”false” DynamicChildLimit=”0″/>
4. Save and you’re good to go.