>>the flat file will be effectively a database.

May be the problem is your interpretation of the term "flat file".
A database is a structured set of data.
A flat file is an unstructured file, then by definition cannot be a 
database.
May be you (your non idiot client) means "independent file" or "stand 
alone file", which is different.
There are many database systems that use undependable files. The 
simplest may be Access:
only one file per database.
Or even FoxPro : one directory per database, one file per table or index.

But a true flat file would only be a "representation" of a database, 
like XML.
An XML file, or an SQL code source file, can be used to represent a 
database
as an exchange format, for import/export purpose, but it is not workable.


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