I find that the most common recommendation is the "rule of 1000" based on the
limitations of the enumeration interface: you don't want to end up with any
interface (either in the gui or on the back end, such as backup) that has to
enumerate more than 1000 items at a time in general, so organize your content to
keep within:

1000 files per folder,

1000 folders per document  library,

1000 document libraries  per site, and

50 Mb per file

I think this should maintain throughput and performance in reasonable limits and
not cause access to the document library  to become your bottleneck. I haven't
done direct experimentation to test this, but I hear this recommendation a lot
and when I follow it myself I haven't seen problems so far with up to several
hundreds of thousands of documents.

I've not heard the rule of 1000 before, however, SharePoint does have a
performance issue with any view over 2000 items. So as Todd referred to, try to
keep your views under this limit.

It seems to have originated as far as I can tell with some testing that was done
in 2005 and published by Mart Muller (e.g.
blogs.tamtam.nl/.../...mentLibraryLimitations.aspx ) .
The related article at
blogs.tamtam.nl/.../ct.ashx\
http%3a%2f%2fwww.microsoft.com%2ftechnet%2fprodtechnol%2fsppt%2fwss%2ffsdoclib.m\
spx has some more details about throughput results from their testing that is
old but probably still mostly relevant.

And I think you're right, the "knee in the curve" is supposed to be at 2000
items nominally from the original Microsoft testing. Sorry, I really don't know
if there is much of a difference between 1,000 and 2,000 in terms of performance
and throughput, my clients have been willing to be conservative so far when they
are going through the trouble of reorganizing all their documents anyway.

The recommended limit is 2,000 items in a list view. While that is true, nothing
magically happens between 1,999 and 2,001 items in a view. Realistically, you
don't
want more than 300-500 items in a single view. In fact, you should keep most
document
libraries under 500 items total. Why? Because users could always create a view
that
showed all items and kill the database performance hosting that list.
The 2,000-item limitation, at a given level, applies universally to SharePoint
Products
and Technologies. You can download an in-depth white paper at http://
technet2.microsoft.com/Office/en-us/library/6f03049f-5bfe-4807-b609-0e2d4a9ec3b5\
1033.mspx
for more information. There are exceptions, such as targeted programmatic
access, and
these are detailed in the white paper.

Folders are almost twice as efficient as INDEXED views, but are easily
circumvented by custom views that don't include folders. This is all about end
user training. Check out the folder w/out view, and folder vs. indexed view
graphics captured by the product team using VSTS 2005. They tell the tale well.

technet.microsoft.com/en-us/library/cc262787(TechNet.10).aspx (may warp,
so just copy and paste together)

1000 items is the limit we have run into when you apply individual
permissions to documents. We ran into it first in a wiki library  where the
client had individual permissions on Wiki pages. It got really nasty.