PC Architecture limit is 4 partitions per physical drive. Drive letters though are a different story.
There are three types of partitions: primary partitions, extended partitions and logical drives. A disk may contain up to four primary partitions (only one of which can be active), or three primary partitions and one extended partition. In the extended partition, the user can create logical drives (i.e. "simulate" several smaller-sized hard drives). Drive total is 24, C: - Z:, however, if you have removable drives or attach network drives, you must leave drive letters for them to use.
That said, new technology is arriving to handle large, very large drives, GUID, see this MS article --> http://support.microsoft.com/kb/302873/en-us but you do need firmware (BIOS) support for this.
More info ==> http://en.wikipedia.org/wiki/Disk_partitioning