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I just suggested to Ethan that the topic of when to use folders vs. projects vs. action groups would make a good video.

But as Craig mentioned, folders are most commonly used for areas of responsibility while projects are most commonly used for something that has a desired outcome. In your example, "Product A" doesn't really have an outcome. "Version 8.0" might have a desired outcome, but it is probably going to be pretty large and complicated.

Whenever possible, a project should have a concrete outcome that you can use to determine whether it is really done or not as you are reviewing the project. So, you might have a "Add AppleScript support for parsing tasks in Mail messages" with steps like:

- define grammar with examples
- solicit feedback
- write test cases (starting from examples)
- implement parser
- add white box test cases (now that the implementation is clear)
- fix bugs until all tests pass

I might decide that I'd like to break up 'write test cases' with a bit more detail. Action groups are really free form, but in general we now consider the leaf rows to be the actionable items (action group headers will never show up in context mode, for example) while the action headers provide some context for your review (are there any more test cases I can think of that need writing?) and for scheduling (writing test B doesn't depend on test A, so I could mark that action group parallel).

Hopefully this provides some guidance on when to use folders, projects and action groups. If you have further questions, make sure to post them so Ethan can address possibly them a video =)
CTO, The Omni Group