I've not experimented with the theoretical limits of the file manager, as such.

Is there nothing you can do to be more granular with the file-sets? It was obviously intended to be used as a taxonomy based mechanic, so having users upload everything into a single file set is equally as bad as uploading them without any.

Assuming the MySQL tables are indexed correctly, there shouldn't be a big performance hit in using the file manager. But if you're going to have 50,000 images in one file-set, you're probably setting yourself up for a fall.

I'd look to implement a more granular set of file-sets, to be honest. I think you'll have administrative headaches before the CMS falls over!

I agree.  There's nothing technically keeping this from working, but it maybe an admin nightmare.  What about using an attribute in some way? They're assignable to files too
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I have always wanted to do something like this, allow an attribute or filter to be passed through to the file manager, so that the amount of images displayed can be limited to a subset. Similar to the save search function that currently exists.

We currently create multiple sets and these get complicated to admin after a while.

If an attribute or something similar could be passed through to help load an initial search or filter that would really help.

Thanks for the comments guys.

Regarding the admin, no one accesses these images through the file manager. On upload the images are stored within a fileset, then assigned to 5 separate (image/file) page attributes.

There is a front end editing interface that lets the user edit or delete the images. It pulls back the relevant images by identifying the page id they want to edit then pulls out the page attributes in question with the files associated.

Realistically we don't need to access the images in the file manager. I just wanted the images to be available for use with C5's image object and putting them in the file manager is the only way i can see this happening.

Am i going about this the right way or would you suggest a better method..?

One of our projects has c.15k files in the file manager... we've not noticed any performance hits as yet... (although I think there might have been an index or 2 in mySQL that we had to tweak)