<< According to Cisco, the max amount of workstations you want in a flat network is roughly:
IP--500
IPX--300
Appletalk--200
NetBIOS--200
Mixed--200
This just goes to show that whoever told you that was full of crap.
Pick up a book on TCP/IP, or at least take a glance at Designing Cisco Network. There are so many resources on the subject that you shouldn't have to rely on n00bs who spread misinformation like that. >>
These figures are on a P2P network, add in a bridge and you can double it, add in a few routers and the sky is the limit (to a reasonable extent of course)