I've seen some photo's here on the forum of some rather large clumps of iris. The visual effect is stunning, but I'm wondering how large should you let them get before you start to divide up the clump ?

If the rhizomes start to grow over the top of each other, they will need to be thinned. Thinning some out every year allows you to maintain a clump for a quite a while without actually dividing it. When you divide, you can replant several of the same kind to give the same appearance of a large clump. Each cultivar seems to have it's own way of growing, and some just seem to grow nice and don't get too crowded for a long time, others seem to grow all over themselves and need thinning more often. So the answer to your question is "It depends on the individual iris" and your preference to how large an area you want covered with one kind of iris.

Good advice, Tom. I planted several rhizomes of Ocelot in a circle, with the growing side out, and every year since I have added soil around the clump and kind of levered up the outside of the clump so the rhizome was back on a level instead of going down the slope. Occasionally I cut out a section with a knife if I see one area is getting too crowded and plant it elsewhere. I think this is a winning method for me.

Depends on the kind of Iris you're referring to. Rhizomatous iris like germanica need to be divided much earlier than let's say sibirica because the inside gets congested/old and because of that don't produce blooms anymore.
Germanica needs to be divided every 3-5 years while sibirica can last up to 10 I've heard.

General rule is if the flowering decreases: divide

most commercial growers divide yearly for better crop, my home ones divide every 3 years.

D

Yes -- you're referring to Tall Beardeds and Dwarfs, right Dee? I divide at about the three-year mark too. I will try to postpone to four-year if I can.