[database] database vs. flat files

What types of files is not mentioned. If they're media files, go ahead with flat files. You probably just need a DB for tags and some way to associate the "external BLOBs" to the records in the DB. But if full text search is something you need, there's no other way to go but migrate to a full DB.

Another thing, your filesystem might provide the ceiling as far as number of physical files are concerned.