One of the more convenient features of the Android OS on your mobile phone is its immediate syncing with your Gmail contacts; phone numbers, email addresses, even photographs are saved to your phone when you sync the account. But since Gmail saves just about every single address you've ever corresponded with, you could end up with thousands of contacts in your phone, which could lead to a significant decrease in performance of your device.
There's no specific number of contacts that equals too many, but in my experience it took about 4,500 Gmail contacts to affect the Droid's performance. It's easier to manage these contacts from your computer; visit google.com/contacts for a list of current saved contacts — I was surprised to see a list of nearly 2,000! Besides helping your phone run efficiently, organizing the contacts in your phone keeps those you frequently email accessible while keeping rarely used contacts from cluttering your contacts list.