I was reading on Engadget.com that Apple wanted the phone to have a limit of 25 songs, and 100 was the compromise. If you bypass the iTunes part of the phone you can have more than 100 songs.
Our sources at Moto tell us that Apple had originally insisted on a completely ridiculous 25 song cap because of “licensing issues”, and that the current 100 song limit was the compromise number they settled on. We prodded Motorola CEO Ed Zander about this at last night’s launch event and his response was simply, “Ask Apple.” Ironically, the ROKR E1 has a generic, non-iTunes, Java-based media player that can play as many MP3s as you have room for on your card.
http://www.engadget.com/entry/1234000570057877/