Recently I had a case where an application which was working fine suddenly started slowing down and apparently there were no code changes made. After checking around at Database properties found that Recovery Model was set to “Full”. In fact it was not needed according to the backup policy as only full backup was scheduled, not at the level of transaction log.

Setting the Recovery Model to “Simple” solved the problem and application was back on acceptable performance.

Check this link to know more about Recovery Model :
http://msdn.microsoft.com/en-us/library/aa173531.aspx