To start I checkboxed "Save As File" for everything. EE Templates and Low Variables. I was reading on performance and from what I can tell, doing that, save as file is a performance drainer. Can anyone verify that, should I uncheck the option?
Lol wut? Unless your database is behind a caching service (like memcache) and therefore loaded in memory, grabbing your files from your database is much more overhead. Where do you think database files are stored ;) ? They are on hard drives too. A well tuned, cached database would be faster for reads, but if you don't have that going on, saving as a file is much better. It also allows you to edit your template files with the editor of your choice, and well as set your templates in a repository.
Save as file is undoubtedly way better than just hitting the database. The only place it hurts is if you use the EE template editor, than on write you'll be hitting both the database and writing the file, but seriously, are you saveing templates through the EE template editor at a rate of 20 or 30 times a minute all day? Nope. Reads, however, just hit the file (when someone visit a page on your site). Which is definitely faster.
Enabling Save As Files in Low Variables does have a slight performance impact. In order to tie in to native EE functionalities, LV needs to update the native
exp_global_variables table with the data gathered from the files. This means, in contrast to what jchrono-battle is saying, EE does not load from the DB or filesystem, as far as LV is concerned. Rather than that, the files are synced from/to the DB and then loaded from the DB later on in the process. When not saving as files, the first step is skipped.
My advice would be to use the Save As Files option only in development environments, and don't use it in production sites.