By default database is stored in folder:
Vista or later:
C:\Documents and Settings\<username>\Local Settings\Application Data\Finkit\ManicTime\
From ManicTime, you can open this folder by going to Tools and settings -> Advanced -> Open DB folder.
Database is in file ManicTime.sdf and it is in Microsoft SQL CE format. You can open this folder from ManicTime, go to Tools -> Advanced -> Open db folder.
On a computer running 5 days a week, 9 hours per day, the database grows at about 50MB per year, so 1GB of space should be enough for 20 years of usage.
Changing database location
If you would like to keep the database in different location, download this file. Edit the file with the location you want and copy it to Program files (x86)/ManicTime. It needs to be named ManicTimeSettings.xml.
You can also use the Portable (Usb) version. In this case program files and database will be kept in the same folder. To use Portable (Usb) version, download the file, extract it to some folder and run ManicTime.exe. Database will be located in the Data subfolder.