You can open a map with size higher than 256x256 in the normal WE, but you can't save (you get an error saying your terrain is too big).
Also, there's no reason to switch between NewGen and normal WE. NewGen can do anything the normal Editor can, and more.
@ reason 3: The terrain size itself is no problem for any computer. A bigger map just has a higher amount of doodads and units that can make the game laggy.