You should also search the LB forums for posts by user "Ratz". If memory serves he has a detailed description of a GTD implementation in LB.
I set up my old LB with areas of focus (Work, Home, Family, Service, Fun), with sub-areas under those. I treated the bottom level items as tasks, and the level above that as projects.
Ratz went through several different schemes, some of which were very far from canonical GTD. I'd stick with Focus Areas->Projects->Actions if that appeals to you. I've also seen people just set things with separate top-level items for each context, so the outline just functions as a list of list. Kind of misses the point, but it can work. Two tips: if you have an item in a context list on the desktop, you can give it a subtask without going back to the outline. Also, some icons have somewhat obscure but useful navigational capabilities. It pays to read the documentation carefully.