Recently I have been involved in a large migration from a previous version of Sharepoint to 2007.

We came across some odd behaviour at times, when we were modfiying and updating the existing site after the move.

After a lot of digging around I came across the following KB article.

Windows SharePoint Services users cannot delete a folder, a document library, a site, or a site collection if either of the following conditions is true:

The folder, the document library, the site, or the site collection contains over 40,000 subfolders and documents.
The size of the folder, the document library, the site, or the site collection is larger than (but not equal to) 2 gigabytes (GB).
Windows SharePoint Services users cannot rename a folder, document library, site, or site collection if either of the following conditions is true:
The folder, the document library, the site, or the site collection contains over 10,000 subfolders and documents.
The size of the folder, the document library, the site, or the site collection is larger than (but not equal to) 500 megabytes (MB).
The calculation of the maximum number of objects that a folder, a document library, a site, or a site collection can contain includes the root folder, the subfolders, the documents that are contained in the root folder, and the documents that are contained in the subfolders.

For example, a document library that contains 9,993 documents exceeds the maximum limit of 10,000 items. The number of items that is calculated for the document library is actually 10,001 because the number of items includes the number of documents (9993), the number of files in the Forms folder (6), the forms folder (1), and the root folder of the document library (1).