I forget the exact limitations of evasion, but it could be any of the following.
Limited to 5% increments. Might be critical strike instead that has this limit instead.
Inaccurate at high but still <100 percentages. Always skews down so less than specified evasion amount. This is because the game has a limit on how many consecutive miss rolls you can receive and at high miss chance you hit this limit most of the time. Might also be critical strike has this limit instead.
Stacks by best source takes priority over all others. For example in melee if Demon Hunter has Level 1 evasion and an amulet of Evasion then he might as well not have Level 1 Evasion. At Level 2 Evasion he might as well not have the amulet.
Most of that is wrong.
Evasion does not use the pseudorandom system and therefore is not rounded to the nearest 5%, and also is not inaccurate at higher percentages and also does not have a maximum number of consecutive hits where evading an attack is guaranteed.
The evasion ability per se does
not stack. Only the three different kinds of evading an attack can stack. Those three are:
-evasion ability on attacked unit
-blind buff on attacking unit
-higher ground evasion in favor of attacked unit
If a unit has more than one evasion ability the highest value among those abilities is used and the others are disregarded. Same applies to blind buffs.
So the complete evasion stacking formula is
chance to evade = 1 - ((1-x)*(1-y)*(1-z))
where
x is the highest evasion ability chance on the attacked unit
y is the highest blind buff miss chance on the attacking unit
z is the higher ground miss chance
@topic: The only limitations that come to my mind right now are that doomed, sleeping, sheeped and paused units have their evasion abilities disabled.