psychology - How many objects/things can the average person compare at once?

I recall reading that the average person can only effectively compare 7 things at once. Has anyone heard of this and can reference any studies/research done on object comparison?

To give you some context for why I am asking: I'm designing a bar chart and wondering how many bars should be displayed. We are dealing with relatively large sets of x-axis members (100+) so displaying all the members is not an option, the plan is to sort the members, display the top x, and group the remainder into an 'others' bar (which would show the avg. value of all the grouped members) - I'm wondering what "x" should be.

Answer

First some clarification of the working memory theory.

Miller never said that people can only keep seven things (+/- 2) in their short term memory. His paper was about working memory (an entirely different concept). There are various numbers (note the plural) representing the chunks of info we can work with that are affected by context and type of information. As Miller and numerous others have found, they are generally lower than 7, with some types of info being as low as 1.

I hate citing wikipedia for something like this, but theirs is the neatest layman's write-up I have seen: http://en.wikipedia.org/wiki/The_Magical_Number_Seven,_Plus_or_Minus_Two

With specific regards the bar chart - users will typically only compare two bars at a time (by compare I mean not just look for the blunt affect of higher and lower, but actually check the numbers represented). They will fix one bar as the standard, and then scan the other bars measuring each against the standard, one at a time. The entire graph can be scanned for the trend over time - erikrojo's highs and lows - but that's a different form of comparison.

In short - I'd recommend you use as many as you need to provide meaning to the numbers in your context. If it's too many on the x-axis (requiring a horizontal scroll), consider providing a means for the user to freeze a section of the graph or select the number to display per jonshariat's answer.