Howard, I agree. I just checked one of my sql dump files. After 1 1/2 years of running Moodle 2.0., my database is only 123MB. Not bad, especially since I have Moodle setup to save all logs.
Typically, were are the database files in a Linux system?
/var/lib/mysql seems popular.
You will find a separate directory for each database under there.
Great! I knew that these database files had to be somewhere. I won't forget this.