<p>I will have around 200,000 images as part of my website. Each image will be stored 3 times: full size, thumbnail, larger thumbnail. Full size images are around 50Kb to 500Kb.</p>

<p>Normal tech: Linux, Apache, MySQL, PHP on a VPS.</p>

<p>What is the optimum way to store these for fast retrieval and display via a browser??</p>

<p>Should I store everything in a single folder?
Should I store the full size images in 1 folder, the thumbails in another etc?
Should I store the images in folders of 1000, and keep an index to which folder the image is in?</p>

<p>Thanks for any advice.
Albert.</p>

Depends on how you're indexing them, for how to retrieve them.
There's nothing particularly against storing them all in a single folder, but it becomes difficult to manage.  If you're storing them by filename, and the filenames are reasonably normally distributed, you might want to have subfolders separated by first letter of the name, etc.  If you're indexing by date added, you may want to segregate them by that.
As far as I know, there's no "faster" or "slower" way to store the images for browser retrieval.