Our users are finding that they cannot create letters
(activities) in CRM which are longer than 2,000
characters.

Having copy/pasted text into the description field, IE6
(SP1) throws an error saying no more than 2000 chars are
permitted in the field. We are sure IE6 is the problem,
because the error is thrown before the form is posted.

SQL Server (via the CRM Deployment Mngr) reports that the
description field on a letter is ntext, ie 1Gb limit, not
2000 chars limit.

We are using attachments to notes as a workaround for
string long letters/emails, but this is a pain.

Any ideas anyone?

There is a limit of 2k characters because the control that is used to display these fields as a limit of 2k characters. Using an attachments is the way to go for the moment.