Yes, there is a theoretical limit -- the "Rayleigh criterion". http://en.wikipedia.org/wiki/Imagery_intelligence#Satellite http://en.wikipedia.org/wiki/Imagery

Yes, there is a theoretical limit -- the "Rayleigh criterion". http://en.wikipedia.org/wiki/Imagery_intelligence#Satellite http://en.wikipedia.org/wiki/Imagery_intelligence#Satellite "This means that it would be impossible to take photographs showing objects smaller than 16 cm with such a telescope at such an altitude. Modern U.S. IMINT satellites are believed to have around 10 cm resolution; contrary to references in popular culture, this is sufficient to detect any type of vehicle, but not to read the headlines of a newspaper."