As already mentioned, you can see the size of the circular buffer with logcat -g. On my Galaxy Nexus, it's 256 KB:
shell@android:/ $ logcat -g
/dev/log/main: ring buffer is 256Kb (255Kb consumed), max entry is 4096b, max payload is 4076b
/dev/log/system: ring buffer is 256Kb (0Kb consumed), max entry is 4096b, max payload is 4076b
If you need to save a continuous log longer than that, you can just open a new adb shell and type
logcat -f myfile.log
This command redirects log entries to the file myfile.log on an ongoing basis, and won't return until you hit ctrl-c to stop it. Now go back to your original adb shell and type the command you wanted to log, and all its output (more than 256 KB in my case) will get saved to myfile.log.