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My general strategy is to keep projects as small as possible, organized into many folders. One of OmniFocus's best features is the "focus" capability, and it can focus on any project, folder, or group. It cannot, however, focus on anything less than a complete project.

This strategy allows for ease of focus, but there are benefits to making larger projects composed of subprojects (action groups). With projects that must be completed in order, you need to mark the first action of each one as a "waiting for" action, to be reassigned a context manually after the prerequisite project has been completed. In this case, the action group model works more efficiently, because there's no need to manually navigate to the next project and remove the "waiting for" condition. This is a very useful functionality for organizing projects... I need to re-evaluate some of my projects and see if it's more appropriate to combine them into a single project with action groups... at least those projects that are 1) related and 2) have a definite order required for completion.

Very good topic. I'm looking forward to hearing more ideas... you can go too far in either direction, I think.