Currently we have thousands of Microsoft Word files, Excel files, PDF\'s, images etc stored in folders/sub folders. These are generated by an application on a regular basis
I would have both.
I would keep the files renamed with an unique name, thus easier to manage, and i would keep all meta data inside the database (file name, content-type, location on file system, size, description, etcetera), so the files are accessed through the database (indirectly).
Advantages:
You can have compression on a drive also. You can have RAID for backup and speed.