Do you mean "effectively unlimited"? They're not inherently unlimited in the current implementation; quite the opposite in fact!

I don't think they are "effectively unlimited" either, perhaps closer to "effectively dividable forever", which might not be true, not sure. However, once they are in full circulation they will be a deflationary currency, and giving someone a sliver of a bitcoin that's worth as much as what a full bitcoin was worth at X time in the past is not the same as adding more bitcoins.

I remember one of my economics professors always pre-pending "All other things being equal" before, relating any theories. I keep that in mind every time I start thinking about anything to do with economics, the pile of assumptions on how things are going to work is usually problematic.

That's still not unlimited (tempted to quote Princess Bride here, but you're not the OP, so it wouldn't quite fit).

Unlimited for the purpose of moving currency. Right now just trying to move a million dollars by Bitcoin will move the market significantly and likely one party will get screwed.