Thanks for the input. I really like your idea of referencing the files on the my Project list, and I'm planning on giving it a shot.
The answer is both. As the number of inactive projects has grown, it has become harder to find files and part of the issue is knowing whether such a file even exists. After a couple of years, I can't remember whether I had a project on something, let alone whether I archived a support folder on it.
On the one hand, I think I should be reviewing these folders and integrating whatever I need to retain into my A-Z general files. On the other hand, it sounds like a lot of work
With respect to Powermarks and whkratz's suggestions, I've got the software, and am using it for filing, but I don't like the idea of going to numbered files. That would force me to go to the Powermarks index to retrieve documents from any file - and I also agree with reyes' comments on the fragmented files. I'm more of a GTD purist in that regard and use text labels so I can pull a file without turning my PC on. (I'm trying to cheat and to get the best of both worlds with Powermarks).