SharePoint 2007:
When more than 1,000 security scopes are created for folders or documents in a list, there’s a significant performance degradation in SharePoint operations that badly affects end users operations(rendering content) as well as SharePoint activities like indexing SharePoint Content. After the number of unique security scopes exceeds1,000 per list, SharePoint uses a code path that requires additional SQL round trips to analyze the scopes before rendering a view. When there are 1000 or fewer scopes, only one round trip is required.
SharePoint 2010:
When a greater number of unique security scopes than the value of the List Query Size Threshold (default is 5,000) set to the web application are created for folders or documents in a list, there’s a significant performance degradation in SharePoint operations that badly affects end users operations(rendering content) as well as SharePoint activities like indexing SharePoint Content. After the number of unique security scopes exceeds the value of the List Query Size Threshold, SharePoint uses a code path that requires additional SQL round trips to analyze the scopes before rendering a view.