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So, I've found that the only way for me to successfully use OmniFocus is to treat projects like folders and put my real projects as groups.

I don't have an exact count, but I probably have somewhere around projects in OmniFocus right now. When I tried to do it the "right" way, I found dealing with that many items in the interface provided by the sidebar to be completely frustrating. Now, I have 3 folders and 12 projects in the sidebar and everything is much more manageable. The 12 projects are all things that can never be complete, like "maintain car" or "finances".

The primary downside I've found with this approach is that I can't apply project-level statuses to action groups. For example, there is no way to put an action group "on hold" or simply drop it. Though this is annoying, I'm still using OmniFocus because of is support for start and due dates and repeating events, all things that are really useful to me as compared to OmniOutliner, which I was using before.