Newmei,
You weren't specific about the type of RNAV you are talking about.
If you are talking about a GA type RNAV based on VOR/DME (like a KNS-80) then you are left with reception ranges and yes you would have a hard time holding a fix like VOR XYZ at 150 miles. (PS, I think you can only put 2 digit distances, i.e. 99.9 miles in a KNS-80 if I remember correctly.)
If you are right over the XYZ VOR and put a point 150 miles on the 360 degree radial, you would have needle on the CDI as long as the VOR was receiving course and DME info. So the computer would calculate and display needle, but eventually you would get flag and no signal when you get out somewhere in the 45-85 mile range.
Now, if you change your guidance to an FMS unit or INS, now your waypoints have a theoretical unlimited mileage. New FMS units are going to use GPS, VOR/DME and possibly INU's to calculate the waypoint - YOU, the operator, are doing nothing to control the input chosen by the box - you simply put in a waypoint and say "go there". The box will pick the best signals and calculate the method to get there on a straight line. If the box has good GPS signal, then it will use that. If no GPS then it will create a string of VOR/DME stations to keep the path - changing the stations (if it is in auto seek mode) at will to do the job. And then the final box trick is to revert to the Inertial Nav Units and basically Ded Recog a path.
The FMS in VOR/DME mode works like a smart pilot using the old KNS-80 logic.
In the old days (before GPS - oh my gawd!), we would look at our sectionals and low enroutes. If you wanted an RNAV direct route, you would create a string of dots and then measure each dot from the closest VOR/DME station. Using the #1,2,3,and 4 positions - you would just load the waypoints and then fly to each waypoint #1, 2, 3 etc like you were just changing stations. The hardest part of the whole deal was giving ATC a coordinate that you would be flying "direct" to. If the end point was NOT a VOR, then you better be pretty good at giving Lat/Long's to the controller.