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data <- read.delim("C:\\test.txt", header = FALSE, sep = "$$$$$")
Error in scan(file, what = "", sep = sep, quote = quote, nlines = 1, quiet = TRUE,  : 
  invalid 'sep' value: must be one byte

Why there is a restriction like this? Can I overcome it?

+1  A: 

Here is a potential solution.

Assuming this is what the lines in your file look like

1$$$$$2$$$$$3$$$$$4

The following will create a matrix with the variables stored as characters.

do.call(rbind,strsplit(readLines('test.txt'),'$$$$$',fixed=T))
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