When you create a schedule you generally don't know enough to enter all of the detailed activities the first time through. Instead, you identify large chunks of work first, and then break the larger chunks into smaller pieces. These smaller pieces are, in turn, broken down into still smaller and more discrete activities. This technique is referred to as creating a Work Breakdown Structure (WBS).
An appropriate question to ask is how small the activities should be before they don't need to be broken down further. This is referred to as your "estimating threshold." You can break work down into activities smaller than the estimating threshold, but you would normally leave no work at a higher level. The threshold can be different based on the size of your project and how well the work is understood.
You can use the following criteria as a guide. For a typical large project (say 5,000 effort hours or more), any work that is greater than 80 hours of effort should be broken down into smaller pieces. Medium-sized projects (say 1,000 effort hours) should have activities no larger than 40 hours. If the project is small (say 200 hours), you should break down the activities into work no greater than 20 hours. Remember that this threshold is an upper limit. You can break the activities down further if you want.
Assigning work that is smaller than your threshold allows you to manage the work better. For instance, if your project is 250 hours and you have activities that are 80 hours each, you won't have enough time to recover if one of the activities is late. However, if the largest activity is 20 hours, you can find out much more quickly if work is not being done on time.
Of course, it's possible that you can't break down some activities less than the threshold that because there may be too much that is unknown about the work itself. In this case, the distant future work can be left at a level higher than the threshold. However, if you leave future work at a high level while it's in the distant future, you should still break the work into smaller pieces at least two to three months before you need to start executing the work.
In addition to allowing you to manage the work more effectively, another reason to break down activities into smaller pieces is to make sure you understand what the work means. When you assign a team member an activity from the schedule, he may not understand what the work is and he may ask you for an explanation. If you don't know what the work means either, you'll be in trouble. For instance, if an activity that's estimated at 80 hours has never been done before, it may still need to be broken down into smaller activities to ensure that the team member that is assigned the work knows exactly what is expected.
These two factors — the ability to manage the work effectively and to understand the work required — should drive your decision on how small to make your activities.