I don't know if there is a true limit, but many filesystem types fall down performance wise well before they hit true limits. For instance, with NTFS I've seen 3 1/2 million files in one directory, so in theory it works.
It is important to note that there is no such thing as "NTFS" or "ext3".
There are many versions of these filesystems, and they can be
tuned/mounted with various options, all of which may have a very
measurable performance impact. NTFS of NT4 isn't the NTFS of Server
2003 which isn't the NTFS of Server 2008.
The same is true of ext3 across kernel versions (although a ext3 created
under and older kernel may retain its older defaults under a newer
kernel unless specifically upgraded; directory indexing being a good
example of such behavior).
--
Adam Tauno Williams