I keep a master folder of all my books on the PC. (which is also backed up to DVD)
At one point I had about 6k of books on the SD card, and about 2k of them were loose, unsorted in the root directory. That did seem to slow things down some. Delays of 1 - 3 seconds longer than I expected, etc.
Eventually I cleaned up the card, sorted out all the unsorted stuff, removed some stuff that I'm not likely to read soon. Got down to about 4k books, and the jetbook went back to being snappy again.
But yes I do delete "most" books as I read them. Knowing that I have copies in my master folder. Just makes it easier to keep track of what I've read.
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