I see this same behavior without using nitrogen.  I simply run a daemon
that regenerates the image nautilus is pointing to as the desktop
background periodically.  After leaving it running overnight, I get the
same "Maximum number of clients reached" error.  I can continue working
for a while by killing nautilus, or chrome, or some other application,
but I have to restart X to get back to normal again.

** Also affects: xorg-server (Ubuntu)
   Importance: Undecided
       Status: New

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https://bugs.launchpad.net/bugs/1045899

Title:
  Maximum number of clients reached

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