WSS List limits

Performance with large lists and document libraries has also been another concern with Windows SharePoint Services 2.0. For example, lists often start showing degraded performance when the number of items exceeds 2000. Document libraries have similar performance concerns. However, the rule of thumb for not exceeding 2000 documents applies to each folder within a document library as opposed to the document library itself. Therefore, coming up with a scheme to partition documents across multiple folders within a document library has come to be a popular approach in Windows SharePoint Services 2.0 for dealing with a large number of documents.