By creating a distribution list in Outlook you are really just grouping a bunch of email addresses into a single "name".

When Outlook sends it, it really is sending to each of the people - 25 individual emails with all the addresses on the "To" or "CC" lines (if there are 25 in the group for example). Outlook is the only entity that knows about the group and who are in it. Since I would bet you are using a SMTP server (rather than an Exchange Server) you will probably have the same limit of 25 (so if a group has 30 then it will be rejected).

You could create a number of groups, each 25 people, and send the message to each of the groups. This is very cumbersome. Your other option is to create a mail list (sort of what I did with the chips@face list) or use an external program to manage it. A free one can be gotten at http://www.infacta.com/download.asp where it will manage the list and then send up to 100 individual emails (there are other programs that do the same with no limits to the number of people on the list).