I'm using a value list from one table to manually enter the foreign key in another table. Using first field and show data from second field etc. The value list currently has 1685 entries which obviously is the number of records in the table that it derives from. This number of records could grow significantly over time. Therefore is there a maximum number of entries that a value list can take? If so, what are the alternatives?

I don't know what the size limit is, but I would assume you would run into usability issues before you run into performance issues.

Have a look at this demo for an alternate method of selecting a related record: http://fmforums.com/forum/topic/73737-value-list-based-on-another-field/page__p__349257#entry349257

You could assign categories to the values. Select the general category first and by using the related records option in the value list options the value list will be filtered by the category.