How many pedals is too many? It's a question that every guitarist must face sooner or later.
I have a theory; ‘use what you need’.
Some people don't use any pedals at all, some use just a few. Then there are those of us that like to use a lot. Using multiple pedals creates a variety of sound and, depending on the type of music played, different tones might be needed to keep the sound true to the creators vision. One of the first artists I got in to that used loads of pedals was Queens of the Stone Age. The duo of Josh Homme and Troy Van Leeuwen created some of the most unique sounds in modern rock. I would spend hours trying to research what effects they used, but it was hard because they would cover their set up and call it, ‘The Veil of Secrecy’. Years later they realized that even though people may know what they use, they can never sound like them because it's all in the player. One of my favorite artists that doesn't use pedals is Tony Reed from Mos Generator. The dude plugs his ESP guitar with Lace Pickups right into his amp of choice and bam! That’s it! He creates some of the most magnificent, magical music with nothing but guitar, cable & amp!
If you choose to use pedals, keep in mind that they should enhance your sound and not diminish it, unless of course, you got a specific pedal to create that good ol’ telephone sound.
The order in which you place your pedals matters too. This is called 'signal chain' and it can greatly effect your tone. Typically, pedals go in between the guitar and the amplifier, though a few folks like to use the effects loop on the amplifier which is just a slightly different approach. If you plug pedals in between the guitar and amplifier, the guitar sound will change before it goes through the amplifier. If you plug pedals in through the effects loop, the sound from guitar will go through the amplifier, then through the pedals, then through the speaker.
There are many different variations you can utilize and the best thing to do is experiment. There's a general variety of effects that some say should always be part of a rig, as well as a specific order they should go, but really there's no rules. Jimi Hendrix plugged his wah-wah backwards to get some unique sounds on Axis: Bold as Love. I, and some other guitarists, use some bass pedals with for guitar. Most importantly: have fun with it and keep searching for tone!
The pics shown here are two board from two separate local bands in Santa Cruz. One is of Ryan Avellone from his band Dreaming Ghosts, and one is mine from my band Still Searching.