my connection can handle 6 connections just fine it's just that when somebody uses all available upload capacity my download speed totally collapses (due to the lack of bandwidth needed to send TCP acks). So, naturally I don't want to allow anyone to do that. However, with 512 kbit downstream there's plenty of bandwidth to handle incoming trafic and if you are a leaf there hardly isn't any upstream trafic.

Having more connections, means you get more results faster with gnutella, also with a TTL of 5 there's only so much nodes you can reach with a search so you need more connections to make sure you're search reaches all hosts in the network.

In any case, the assumption of 512 kbit upstream limewire makes is plainly wrong on most dsl/cable connections. In addition 512 kbit downstream is only one of the many options downstream. On my DSL connection there are providers offering speeds ranging from 256kbit to 2 mbit downstream, for instance.