I bought a new 8gb card but it doesn't seem to work with my D50. Is the camera limited as far as the card capacity?

Yeah, the 8GB card is probably an SDHC card, which older cameras like the D50 (which use only SD cards) cannot read.

But that isn't a bad thing. Allow me to make an pitch for using several cards, rather than one large one. Reason being, insurance. Any memory card can fail or become corrupted. And when you're on vacation the last thing you want is to lose the opportunity to take pictures until you can recover that media card with a software utility. If your card goes bad, swapping another one for it at that moment is of advantage so you can keep taking pics. Then, later when you're in front of your PC, you can use a utility like "F-Recovery" to get back your pictures and recover your card.

No need to lose the moment because you relied on one card one when several can solve that problem. At the very least, you want to get more than one of whatever size you settle on.

One last thing. Cards have different speeds. The faster a card is, the quicker it'll save the photo and cycle to be ready for another shot. In the end, your camera is only going to be as fast as it's slowest link in the chain. So return that card and use the extra coin to get a faster card your camera can use.