Is there a limit on the number of user accounts you can create in Windows 7 Home Premium?

In the interests of curiosity, I created 50 accounts on my Windows 7 Professional VM.

I used net user testx /add where x was a value between 1 and 50 (inclusive).

While I realise this is different to Home Premium, I can at least answer the second part of your question: it looks ridiculous.

This is on my Windows 7 Professional virtual machine running in VirtualBox:

I imagine with the Local Policies you might be able to change the default login screen.

To change the login screen to show Ctrl + Alt + Del prompt, use netplwiz from an elevated command prompt, click on Advanced, and select "Require users to press Ctrl+Alt+Del".

As @BloodPhilia has pointed out, you're only limited by resources, but I'd say if only two or three people are logged in at the same time, you'll be fine.

The number of accounts is not limited by software limitations. However, at a certain point you will run out of system resources to facilitate more user accounts.

Do take note of the fact that only 20 users at a time can connect to a network share that is located on that computer.

I don't know if it still holds true but here's what I found in one of my old notebooks...

Maximum number of local user accounts = 4,294,967,296

This was tested by someone on a 32-bit system many years ago.

Maximum number of local user accounts that can be displayed in Welcome Screen = 100

I wrote this information in some notebook many years ago but I forgot to reference or record the tester. I think he tested it on Win2K and XP Professional. The credit goes to him folks.

Every user account created will receive a unique number or ID which increments each time someone or something performs a delete-create a user account with the same name or create a new user account operation.

Limitations also apply to the hardware where Windows is running.