See more recent folders in Open dialogs Hawaii

Here's how you can increase the limit to whatever you like with one simple Terminal command. Open Terminal (in Applications -> Utilities), enter the following command, then press Return:

defaults write .GlobalPreferences NSNavRecentPlacesLimit -int 10

Replace 10 with however many entries you'd like to see in the Recent Places section of the drop-down menu. This change takes effect immediately, though it will take a bit of time for you to build up additional entries in the list. If, for some reason, you'd ever like to go back to the OS X default, simply repeat the above command, but change the number at the end to 5.

I've got my machine set to display 10 folders, as this seems to strike a good balance between the length of the menu and having most of my recently-used folders in the list.