I have a similar problem to this post. I need to display up to 1000 polygons on an embedded Google map. The polygons are in a SQL database, and I can render each one as a single KML file on the fly using a custom HttpHandler (in ASP.NET), like this http://alpha.foresttransparency.org/concession.1.kml .
Even on my (very fast) development machine, it takes a while to load up even a couple dozen shapes. So two questions, really:
What would be a good strategy for rendering these as markers instead of overlays once I'm beyond a certain zoom level?
Is there a publicly available algorithm for simplifying a polygon (reducing the number of points) so that I'm not showing more points than make sense at a certain zoom level?
For your second question: you need the Douglas-Peucker Generalization Algorithm