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That's a neat idea. I do something similar but keep everything in the same file. I have a "Dropped" folder at the top level of my library called "Archive". When I'm done with a project, or even an entire folder of projects, I just drag it into my dropped "Archive" folder. I have a perspective that opens my Archive in a new, smaller window to make this even easier.

The things in my Archive don't show up in any of my normal views but can still be found with the proper view bar settings. As for performance, my impression is that the speed of OmniFocus is largely dependent on what is currently visible. Items not appearing in the current view don't seem to have an impact, at least not that I've noticed. So I don't think there's much of a downside to just keeping everything in a single file.

Of course, that single file library will grow large over time (but mine is still less than 1 MB). And I'm guessing that an initial sync with an iPhone would take a bit longer. But as long as you're not frequently changing those archived projects, it shouldn't affect syncing after that.

It's nice that OmniFocus allows you to do this in a single file or in multiple files - whichever suits your workflow best.