The limit of folders is pretty high, not sure if there is a theoretic limit on folders. There is definitely a limit on the number of files (of which "folders" is a sub-set). However, there is a HUGE and I mean GARGANTUAN performance hit to be taken when you have huge numbers of folders.
See also this post:
http://forums.yellowworld.org/archive/index.php/t-19104.html
The file system treats a folder like a file. (Well, ... DUH that's what it is...). To find a file in folder, the folder scanner reads the folder into memory and tries to find what you asked for by name. If you have, say, 60,000 such folders, then you have to search a file with 60,000 entries each time you want to open a new file. Don't even ASK what it is like when you have to insert a file reference. Deleting and printing a directory listing will also become cumbersome.
It doesn't get any better if you have just one folder and 60,000 file names (with varying file types). Same problem, different file type. Bloated is bloated however you cut it.
Putting this on another drive wouldn't be so bad if it is local to the machine doing this. But remember, Access isn't the ONLY thing that bogs down with file servers. Opening a window to a folder with 60,000 items in it when running over a network would consume a significant part of your youth, assuming you still had it.
I don't know that I have an answer, but you might be able to get somewhere if you could perhaps use WinZip AND if there is an ActiveX library for it that you could use as a reference. Then at least the individual files for each number become less of an issue and you become better able to subdivide the folders. Say, a top-level folder of the first digit or first two digits of your index number, at most a second-level folder of the next two digits, and then store the raw files (or .ZIP file) if possible. The more you can store in a ZIP archive, the better off you are in terms of files, waste of slack space, and in being able to find the files you want in the first place.
Just because you CAN make a s**tpot load of files doesn't mean you really should.