Bjorn,
I also have a friend that is having this issue and he has 101 bookmarks in his xml and I have verified that there is no syntax error in the xml. What is happening is that the mx repeater is taking longer than the 15 timeout default that flash player has for scripts to run and then it just bombs with several different errors depending on where it gets to in the rendering. So there definitely seems like there is a limit to the amount of data the bookmark widget can use.