It's a good question, and there's no simple answer. A usable solution is key (and also bear in mind that Google wants to execute your 'show more' javascript, so if you were to use AJAX or similar, this may not 'hide' the additional content from Google.
Pagination generally is bad for SEO, since it inevitably creates very similar pages that add very little - except what can sometimes be the crucial function of ensuring every product has at least one link - which is not necessarily the case if you use AJAX - and products with no links to them are all but certain to be deemed low quality and perform badly.
Google have their own suggestion as to how to better handle multiple pages with
rel=next [webmasterworld.com], but I don't have a great deal of confidence on the effectiveness of that.
Another side effect of lots of products on a single page is that your categories become less meaningful, and potentially every category can display almost the same thing, in itself creating lower quality pages.
And then there is the broader question of which is more usable, which is likely to depend on your particular site and audience. But long scrolls are not necessarily the right way to go about it (but then neither is lots of clicks!).
So, a bit of a minefield ;)
