Maximum transaction size in PostgreSQL
I don't think there's a maximum amount of work that can be performed in a transaction. Data keeps getting added to the table files, and eventually the transaction either commits or rolls backs: AIUI this result gets stored in pg_clog; if it rolls back, the space will eventually be reclaimed by vacuum. So it's not as if the ongoing transaction work is held in memory and flushed at commit time, for instance.
A single transaction can run approximately two billion commands in it (2^31, minus IIRC a tiny bit of overhead. Actually, come to think of it, that may be 2^32 - the commandcounter is unsigned I think).
Each of those commands can modify multiple rows, of course.
For a project I work on, I perform 20 millions of INSERT. I tried with one big transaction and with one transaction for every million of INSERT and the performances seem exactly the same.
PostgreSQL 8.3