Which database are you using? In most versions of mysql, the max_connections variable defaults to 100. You can increase it, if your hardware will support more connections. You'll probably need to tune other variables as well. See http://dev.mysql.com/doc/refman/5.1/en/too-many-connections.html and http://docs.moodle.org/en/Performance to start with.
Hardware and performance
Moodle Connection Limitations
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