I have just launched a site - its a resource Kit for teachers with over 360 downloadable files in doc and pdf format in over 20 categories.
This is a document management system not a file management system which means the file repository is held in one folder. I have had no issues with this, although it took me a while to feel comfortable doing it this way.
I found the Docman Populate feature invaluable in categorising the files for the Document management.
The ability to embed the file pathways into article and modules using Doclink was also invaluable.
This module enabled us to efficiently deploy the site in a cost effective way for the client.