No constraints that I'm aware of. Just make sure that the chunk size you use is not too large. I recommend a size between 4096 and 65536. Anything larger than that can cause some slowness in responses due to the memory requirements on the server side. There are no restrictions that I know of regarding physical file sizes.
Also, beware of active log files. They tend to grow and if you have iControl logging turned on you could be causing the log to grow for each iControl method resulting in, as you mentioned, an endless loop. Downloading gzipped up files should not cause any problems.
-Joe