Hi, I'm not really sure about all this, but this is at least what I would think 
>>1. how many users will it support, if its implemented under AppData Folder
>> 2. Is there any restriction in the data size of aspnetdb.mdf, if its implemented under AppData Folder ?
When you are using a datafile in your AppData folder, you are only using the SQL(Express) engine to work with. The actually data is stored in the file on your web site and as far as I know there is no limitation on the size of the file. But with most webhost providers, there is a limitation on web space. So... you can store as much data in it as your web space allows you to. Don't forget that you are then sharing it also with your web files.
>> 3. Will my web site get slowdown if the size of aspnetdb.mdf is large (if its implemented under AppData Folder ) ?
This can be... after all, it must read the file from another location. I presume you will notice it if you have very large records and you need to search through it. Don't know how indexing works when using a database file.
I would prefer using a database if you have the chance than a file in the app_data folder. Express server allows only 4GB of max database size, which is still a lot for a small company (depending what you need to save).