You may CARRY FORWARD capial losses to the next year and deduct to the extent you have capital gains plus $3,000. Thus, your capital losses will be reduced by at least $3,000 every year. You may not carry back losses ever.
For example: If you incur net capital losses of $5,000 in each year from 1999 to 2003 (i.e. $25,000 in total), you would carry forward $10,000 of losses into 2004 (i.e. because you deducted $3,000 in each year ($15,000 total) from 1999 to 2003).
With respect to your second question, if you had $1,000,000 in capital losses incurred in 1990 with no gains or losses since then, you would have deducted $3,000 each year and carry forward into 2005 a total of $955,000. Technically, it would take you more then 338 years to use up these losses at $3,000 a year. However, when you die these losses just disappear.
Because it is impossible for me to identify and consider ALL the relevant facts, this advice is not intended or written to be used for the purpose of avoiding penalties, and cannot be used for that purpose.