I think our own personalities coupled with our dc's personalities really control how we all view "limits".
Before I had my own dc, I had two nephews nearby to watch. One thrives on routine and limits. The other balks. The parents are not good at being consistent in their expectations, so now I watch in amazment as the older child, the one who wants order, tries to force limits, ie "parent" his younger sibling (who actually accepts it amazingly well!).
I dislike constrictive limits intensely. I try not to impose them on my children. I try to base most of my limit-setting on respect of others. Yelling, being rude, name-calling--those are all unacceptable behaviors, but I try to model them. And when I do yell, I always apologize. My 2-yr-old now does the same. She may lose it and pitch a fit over something, but invariably she will "check in" as soon as she is calm to make sure I'm not mad at her for her outburst. I work very hard not to react in a way that can be perceived as a punishment when my children act in a way that I find unacceptable (not that I'm always successful). I try to talk about it, explain why the behavior isn't ok. Then we move on.
The choice discussion is interesting. My older dd, who is now 5, doesn't do well with too many choices. She is easily overwhelmed and is usually fine with my making clothing choices for her (and when she does have her own desires I let her go with it). But my younger dd is the opposite. She needs me to let her make choices. And she needs to do, or at least try, most things on her own. My older dd wasn't that way. They are teaching me a lot about valuing and accepting others' needs.
I think I also react to my mom's "over-management" for lack of a better term. She micromanages, constantly hovering, suggesting, trying to guide behavior. Makes me nuts! She means well but my goodness, my children can tell me when they want to eat, drink, go to the potty, etc. If my children balk at putting on shoes to play outside, fine! If they get outside and are uncomfortable, they will come back and get their shoes! If they want to smear themselves with paint and dance around in the front yard, fine! It washes off! [/rant--deep breath]
Keep talking, ladies. I'm learning a lot and loving it. PM, thanks for continuing to come back to this thread. I really enjoy your posts; something about them really resonates with me.