I don't think there is a hard and fast limit, but I think the framework
will eventually throw an error if you nest way too much. How many are
you looking at? I'd say you're safe in the ballpark of 10-20... but
that's just my gut saying that.

I'd suggest asking the question in a .NET 3.0 or Windows workflow  forum
such as http://www.windowsworkflow.net/ since it won't be a limitation
of SharePoint, more of the underlying workflow engine.

I think we are looking at nesting of around 15/20 workflows.

Is it possible to correlate those workflows  for tracking purpose?
Probably we can write some code for that. But does SPS 2007 have any out of box feature for this?

Correlate??????????????????????