There is no limit to the size of record support by the DAL server. VARCHAR data types (as with a column of type VARCHAR) can be of any length. However, DAL can't return to the DAL client a VARCHAR larger than 255 characters. Using the @substr function, you can return a very large VARCHAR in several substrings.
This information isn't in the current manuals. For similar questions, refer to the DAL Programmer's Reference, or the DAL Application Developer's Guide.