We have an unlimited vacation policy at Adzerk and I try to lead by example by taking at least 2-3 weeks off a year (especially in the summer). We also try to encourage everyone to take at least one solid week off a year and it seems to work pretty well. I think that's the real issue with unlimited policy - if the leaders don't take vacation no one else thinks they can.
- You need a longer break to seriously disconnect: at least two weeks.
- Around Christmas/New Year you probably want to be around family and friends: one week.
- At least a week distributed over the year to do something fun with your kid, visit that distant friend, etc.
Maybe it's because I come from Western Europe, where getting 5 weeks (25-30 days) off in total is pretty normal. But I cannot imagine not breaking yourself at some point with only two weeks of vacation.
Also, as siblings say. This 'no upper limit' makes no sense. If you give e.g. 25 days people know that that's their right and are more likely to take it then 'it's unlimited, but all the good workers take only 2-3 weeks'.