One issue, which will be addressed in the next version of Application Express, is the 32K limit on report columns. This means that only fairly small images are currently supported when using the technique with report queries or report regions. If the XML data is generated some other way, and the PDF rendering is done using the Print API, the use of larger images would be possible as well.
The 32K limit on report columns can be bypassed by using the Print APIs—
apex_util.get_print_document. With these APIs, you can generate PDF and other documents through a simple PL/SQL API call. These APIs take care of all the communication with BI Publisher or Apache FOP.