Sorry for the delay Kannan, I was taking it easy this weekend. :-)
If all your data fits in a single database and it's acceptable to handle requests using a database that resides in a single location, you don't need Shards. MySql 5.1 supports horizontal partitioning within a single database server. I haven't tried it myself, but if it works as advertised it should allow a single database to continue to perform with larger datasets than before. However, there are limits to the amount of data that you can efficiently query in a relational database, and when you find yourself bumping up against that limit it may be a good time to look at Shards.
Hope that helps, let me know if you have more questions.
Thanks,
Max
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