Resolution:
TIBCO BusinessWorks Collaborator(BWC) 5.5 does NOT support File Based Domain. Even for older versions (BWC 5.2, 5.3 and 5.4) it is STRONGLY recommended to use DB based domain.

Following are the reasons which would make it difficult to support File Based Domain in BWC for Workflow (Collaborator) Desktop -
1) Repo based backend is not designed to handle the performance requirement needed by Workflow Desktop. The performance with DB based domain is better for Workflow Desktop applications.
2) BWC can not claim to support File based domain, because the underlying products, PS and Admin do not support File based domain for Desktop Applications.

Does TIBCO BusinessWorks Collaborator (BWC) support File Based domain