I had to recently work on the same and found a solution, i use the wordpress 2.8.3 so to basically change this value
you go to get the file from wp-includes/default-widgets.php
look for this code:
$title = apply_filters('widget_title', empty($instance['title']) ? __('Recent Posts') : $instance['title']);
if ( !$number = (int) $instance['number'] )
$number = 10;
else if ( $number < 1 )
$number = 1;
else if ( $number > 15 )
$number = 15;
change the 15 to any number. then go back to admin / appearance /widgets
look for the side bar or where you have put the Recent post widget, change to the number of posting you want to display.
This worked for me. I changed these values to 50 and at the admin level to 50 to accommodate future posts.
Hope this is handy for you guys