I realize there is a limit as to how many lines of messages Gmail Chat history will show in one page （i.e. 500 lines). After you reach that limit, you would see this message at the bottom:

[Message clipped] View entire message

"View entire message" is linked to the full conversation history and will open up in a new window. See screenshot:

http://lh3.ggpht.com/album.keith/SG2GqiyHekI/AAAAAAAAEi0/1o7JB3H4P6Y/s800/Gmail%20Chat%20Collapsed.png

The problem I have with this limit is that, the history in the new window does not highlight the keywords I have been searching for. Anyone having lengthy conversations and have to refer back to them later too?

Can't you Ctrl+F in your window? I use that in Firefox in like every page. I use Quick Find more-so since it's just the foward slash '/'.