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I knew it that any kind of explanation of "it's slower because it actually works now" would get met with more questions.

The only thing that slows down the game with dialogues is checks. Lines are only relevant per linetype; that is, you might have a tiny lagspike when it has to reshuffle the order in which it will grab one of your 1000 general lines. Thus; you'd be hard pressed to find a limit in dialogue lines.

Searching for the biggest dialogue I have... That took a while.

It's this one: http://www.sdtmods.com/index.php?topic=4338.msg63176#msg63176

405kb in file, file contains 1963 lines (but there's a bunch of blanks in between).

SDT can handle it fine. ... don't try to edit it in the in-game editor though, that's something that SDT doesn't like so much.

Your own limits to handle branches and such break before SDT will. And if you have a really large dialogue chances are that you just have different scenes, and you should consider tying them together with DialogueActions's "da.dialogue.load" variable.