How large data can memcached handle efficiently?
Memcached is more or less only limited by available (free) memory in the number of servers you run it on. The more memory, the more data fits, and since it uses fairly efficient in-memory indexes, you won't really see performance degrade in any significant way with more objects.
Remember though, it's a cache and there is no guarantee that you'll be able to retrieve what you put in. More memory will make memcached try to keep more data in memory, but there is no guarantee that it won't just throw data away even if memory is available if it somehow finds that a better idea.
How large values can I store and retrieve from memcached without degrading its performance?
I am using memcached with python-memcached in a django based web application.