anyways, i thought most (simple) desktop apps store data in text files? (perhaps encrypted?) it's definitely possible to store data in text files for web apps but seems inefficient for many reasons - speed and scalability being the first that come to mind. i've stored data in text files before for very simple apps that contained a couple of fields and had no sensitive information.
my personal suggestion: go with MySQL. it's free, well documented, efficient, scalable, etc. the list goes on...
I tried to avoid databases in my web projects in the past and ended up having quite complicated concurrency infrastructures, based on shared memory and the filesystem. I can't say I was happy with the complexity I got.
Databases, no matter how ugly, clumsy, handle it nicely. In a few cases I made a complete switch to DB and had my code reduced significantly.
So, for me this is still an open question.