I used text files as a large part of my
GTD (getting things done) system. I'm starting to use them more and more, because they have some serious advantages. They're portable, they're platform AND application independant, they can be easily backed up, and so forth.
However, in this article, 43 Folders might have taken things a bit too far. It really sounds like you'd spend so much time organising and arranging your text files to have much time left over to actually do anything.
Regardless, it's quite amusing to see people who spend a lot of time to make sure they do things efficiently coming to the conclusion that text files are the best way to do this.