Update October 2010: These instructions are no longer valid. Take a look at voyageurs60’s comment.

If you’ve ever tried to delete more than 20 contacts in gmail, you might have noticed an error message informing you that you’re only allowed to delete 20 contacts at a time.

I don’t really think of Google as a company that puts abitrary limits on features. Who knows why they decided upon this limit.

Suppose you’ve accidentally quadrupled your contacts list in some sort of import mishap and you just want to start over. There’s a fairly simple – if somewhat non-intuitive – workaround for this. Click the “older version” link it the top navigation bar (http://mail.google.com/mail/?ui=1). This will allow you access to the old contacts list interface.
From there:
1) click “all contacts” tab
2) scroll down to the bottom, select “all” (no idea why this option is not at the top of the interface)
3) Delete!