Some time ago I was having performance issues with my site - one of the many suggestions I got was to use File System instead of MySQL for data storage. Can this be changed on a live site? THe option is there in the Advanced Settings of my admin panel. I might assume that if it is there I can but I want to be sure before I click the option.

Sure - you can change your data storage settings at any time. You will see a one time "long load" as it regenerates everything in the new location, but performance will return to normal after that one time load.

Which option is best however, largely depends on your server environment, so it's good to experiment with the different options (for both data storage and caching) to see what works for you.

Okay. Thank you. I have two additional questions. First, can it be changed back? Second, will going to the File System Method reduce the size of my database?

Yes for both.