Depending on the number of products you have and the size of the disk space available on the server (both web and database server) you need to take this call.
To store and retrieve the images from database, you can go through the following link:
If you want to store the image in the web server filesystem, generate a unique name for this file and store the path of this file in the product table along with the product details
For example: If you have a table named Products with the following schema:
Product Id (can be identity or GUID)
When displaying the product details, give this path as the source to the image element.
Hope I am clear.