It'll limit you to a maximum of a couple of weeks even if you don't exceed a message limit.

There's a LJ FAQ item on it:
http://www.livejournal.com/support/faqbrowse.bml?faqid=148

Your Friends view will only display entries that were made within the last two weeks. If your friends have posted more than 1,000 entries within those two weeks, your Friends view will only display the first 1,000.