The latest video by Matt Cutts reveals theory of links in the light of Google Webmasters guidelines. It tells:
How many links are too many for Google?
How many links should we have on a page?
The top most important thing to know is that Google has dropped its guideline that restricted you from not having more than 100-links per page. Hence it won’t lead to penalty, even if you keep more than 100 links on a page.
It certainly does not allow you to have tonnes of links but gives you defensible freedom to add necessary links.
You can be still penalized if Google considers you spammy
Although this guideline is dropped, Matt Cutts still maintains that Google reserves the right to take action against a website that appears estranged or spammy.
What if your links exceed above 100?
The basic principle behind 100 links is that Google use to index 100 KB of a page. So, if your page is longer than this, it will automatically not be indexed completely because Google may trim it. Hence 1 link per kb is thus the thumb rule that is described by Matt too in his video.
But there are many sites which have even 200 and more links but Google does not penalize them. The reason behind is the user experience and reasonability of links. As quoted in his blog too, if more than 100 links make sense on a page then they are not considered web spam. It is the quality guidelines under design & content rule that will decide whether a website is spammy or not.