According to many sources, the optimal character length (including spaces) is 68. That is the number of characters Google will display in its SERPs (see below), and any keyword after the 68th character is cut off and I am starting to believe that it is either disregarded or given less weighting in keyword searches.
I have seen sites come up very high in the rankings with longer title tags, so I would venture to say that Google doesn’t give demerits for title tags longer than 68 characters, though I would be wary of creating title tags much longer than 80 or 90 characters.

My own Title tag basics for Recruitment websites:
aggregators analysis analytics Analytics & Conversion anchor text architecture Candidates Candidate Supply Code conversion copywriting domain names Flash Fun goals Google inlinks Job-Descriotions job boards job descriptions keywords Linked in Links Long Tail Meta Offline Marketing on-site optimisation organic search ppc Recession Retention rss feeds seo copy Social Media Social Search Technical Titles tweet twitter URLs Visitor Quality Workcircle
WP Cumulus Flash tag cloud by Roy Tanck and Luke Morton requires Flash Player 9 or better.