For me:

Folders - organizational/containers and could be areas of life - Work,
Personal, Family.  At work it could be departments (HR, IT, etc).  A
folder organizing recurring tasks.  This approach is blended with
contexts.

Projects - a group of specific tasks.  When they're done, the project
is done.  To me the beautiful secret of projects is encoding the
project name.

For example, Michael has four weddings to shoot.  They all have the
same basic tasks but they're in different stages.  Tagging the parent
task as a project could give you the following in your to-do list due
today.

[BOC Wedding] - Collect Money
[Lisa Wedding] - Verify Reception Location
[Robisme Wedding] - Upload proofs to website


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