Yes, there is a size limit for your music files, but I'm not exactly sure what it is. Besides, it's best to aim at keeping your files AT MOST around 1Mb in size. The smaller, the better.
And not all features you find in a regular module-file are supported. For instance: there is NO Impulse Tracker (.it) instrument support! You can only use samples.
There are many other limitations to what you can and can't use. Anyone else got details on them?