Catalog segregation - how do I decide

Hi
I have been a PSE user since release 2 and have followed most of the upgrades, skipping the odd one or two until I am now on PSE & Premier Elements 10.
I have just installed 10 and succcessfully upgraded my PSE 8 catalog.  While waiting for that to happen I browsed the brief manlals that were in the pack and was intrigued by the comment in one that it is recommended that you limit the size of catalogs because large ones can slow down system performance.  And, as I have seen some sluggish performance, I thought I would follow that up.
Beyond the comment already quoted I could find no recommendation as to a catalog size.  I have about 16,000 items, mostly photos with some video.  Is that excessive for one Catalog?
Next question:  i
If it is excessive, by what criteria do you carve up the catalog?  I maean with keyword tags, timelines, media types etc all available within the organiser, it would seem that you are actively encouraged NOT to have multiple catalogs.  If you separate by year and want to search for all occurences of a person regardless of date you'd have to open multiple catalogs to do it.  I must be missing something obvious - please set me straight!
On a related note,  in almost the same breath as the reference to catalogs the guide also mentioned albums as another means to collate content.  OK, now I am getting really confused.  Are albums a subset of catalogs?  I undertstand the concept of a phoot album in the traditional sense as a collection of printed favourite photos often organised by theme, but isn't that taking us down the same confused path?
Would really appreciate some help here.  TIA

To add to 99jon answer :
PaulFBarrett wrote:
Beyond the comment already quoted I could find no recommendation as to a catalog size.  I have about 16,000 items, mostly photos with some video.  Is that excessive for one Catalog?
I am still working in PSE6 on an XP PC with a catalog of 32,000 pictures and about 700 different tags without performance problems.
If it is excessive, by what criteria do you carve up the catalog?  I maean with keyword tags, timelines, media types etc all available within the organiser, it would seem that you are actively encouraged NOT to have multiple catalogs.  If you separate by year and want to search for all occurences of a person regardless of date you'd have to open multiple catalogs to do it.  I must be missing something obvious - please set me straight!
You are absolutely right. You can't really work with separate catalogs if they have to share the same items. That can be very dangerous.
On a related note,  in almost the same breath as the reference to catalogs the guide also mentioned albums as another means to collate content.  OK, now I am getting really confused.  Are albums a subset of catalogs?  I undertstand the concept of a phoot album in the traditional sense as a collection of printed favourite photos often organised by theme, but isn't that taking us down the same confused path?
Tags are used to find files sharing a given property. Album ? That's a problem of vocabulary. They were called collections in previous versions (same in Lightroom ?) Collection would be a better choice. They are not defined by a tag, but only by the fact you consider all those file should be in the same 'set'. In the organizer you also can sort those items at will in the the browsing space. 'Smart' albums are really saved queries or 'macros' such as used in Word or Excel. That's the reason you can't sort them.
Edit :
For performance, also see the Adobe link given by 27Prac
http://forums.adobe.com/thread/617271?tstart=0

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