SQL Server can be used as a file store...think Microsoft SharePoint.
The content database stores everything associated to its SharePoint site. That includes any file you upload to a document library, that is not restricted by SharePoint (.exe, .bat, etc). It will store that file in a table as image data type up to a size of 2GB. Now you can store a file larger than 2GB in a SharePoint site, if the quota limit allows it but I am not sure at that point how it is stored in the table.
With the new feature in SQL Server 2008, FILESTREAM can change this a bit by putting a link to the file on the file system instead of actually storing it inside the database. Although with SQL 2005 this is not an option.
With any application it requires careful planning on the SQL Server side to ensure the resources given to SQL Server can handle the workload. If you have planned accordingly though SQL Server is more than capable of getting the job done.