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To paraphrase David Allen, a project is an outcome that will take more than one step to accomplish. The steps are actions.

Single-action lists and folders are not equivalent. A single-action list is just that; a list of single actions which don't have any particular interconnection (must do this one before that one, etc.) A folder is a collection of projects and/or single-action lists which are related in some way, whether it be subject area, priority, etc. but without any interlocking to dictate ordering. So, you might have a folder of home renovation projects that take planning and multiple steps (remodel kitchen, paint garage, put in vegetable garden), and a single-action list of weekly chores that don't require that (mow grass, take out trash, clean toilet). Many of my folders have a catch-all single-action list for the miscellaneous little things that don't really fit into one of the projects. For example, my photography folder, besides having various photography projects ("photograph school Halloween festivities for newsletter", "collect book fair photographs for contest entry"), also has a miscellaneous single-action list that has things like "recharge batteries" (repeating weekly) or "buy another flash card" and so on.

While it may look like you can drag a project into a single-action list, what you are really doing is converting the project into an action group, which is sort of like a lightweight project. You don't get to review it separately, or put it on hold or drop it, see its name in context mode, and there are probably some other differences that aren't coming to mind at the moment. You can turn it back into a project by simply dragging it to the sidebar, or outdenting it. I don't think there is wrong with having a "throw-away" project as an action group in a single-action list if that's where it makes sense to have it. I do this sometimes when I'm doing something that normally I do all at once, but get interrupted and can't finish at that time. I'll make the action into action group showing what I've done and what remains.