Up until now you have only been allowed to have a maximum of 100 friends on your Xbox Live friends list, but that's going to change with the fall update of Xbox Live. You will now be able to have one thousand friends on your list, which will let me become friends with some of my more popular real life friends on Xbox Live.
Microsoft have previously said that the restriction was something caused by the old Xbox Live, but as it was shutdown this spring you will now be able to collect more friends on Microsoft's online service.
Update: Chalk this one up to one of those rumors that tend to become facts after a while - Xbox's Major Nelson has tweeted that this is in fact not coming with the next update. Considering the earlier statements about the old Xbox Live service, it might be something that will be introduced at some point in the future though. But not now!