Basically unlimited, most sms apps can store the txts on a micro sd card and therefore it is only limited by what sd card you put in, i have never deleted any texts in over a year and they are all still stored (thousands). I have a HTC Magic which had smaller internal storage than any android on sale now pretty much.
I've just recently looked at a girl from works phone. She couldn't send or receive texts. Turns out the phone was so full of texts that nothing would send, she obviously cleared the inbox full alert accidently. Any way she had nearly 20,000 texts in her inbox on a cheap Samsung galaxy i550.
I've had my android for over a year and never deleted a text or phone log. (no way near 20,000 but still about 80 odd texts and a couple of hours of calls a month)
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