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Worth Your Time.
First of all, wow. How can anyone let their inbox get THAT big? If you've let yours grown to such gargantuan size without filing, you can't do much else but sleep in the bed you've made. If you intend to keep that much mail, obviously, you need a filing system.
Sets of folders and sub-folders will help separate work, personal, financial, and other categories of mail. I'd suggest you break this down even further by project, individual, store, purchase type, or any other logical small grouping. I suggest this because when you've got your mail filing this well honed, you can set up rules to direct mail to these folders automatically. Once you do it once, you rarely, if ever, have to amend a rule, and you can wait to view mail of different sorts at appropriate times of day, instead of getting it all at once.
This is a great time saver if you're at work, or want to not be disturbed by anything outside of your current project, or need to budget your time for each task. Mail that doesn't pertain to what you need to look at it saved and flagged for later in the appropriate folder automatically. Collapsing folder trees make it even easier to avoid distractions.
As seemingly convenient as mail searches are, odds are you've forgotten specifics about a mail message you need to find when it's one of thousands. Setting up a 2,3 or even 4-deep folder and sub-folder system for mail to presort is, IMHO, the most efficient way to deal with mail and organize information you want to keep. And when it comes time that you don't need a set of messages any more, there's no searching or profiling. You can delete whole folders at a go, messages and all.

I have used folders to keep my mail organized for years. I had a few sub folders but mostly used rules to send email to the correct folder. Then I switched to Gmail as a beta group for work.
Wow, labels are what I want in an email client. Not folders.
For those who don't know, Gmail doesn't use folders. Instead Google used what are called labels. Think of them as a filtered search. The nice thing is you can apply multiple labels to an email, and for me this is a life saver. I can't remember how many times I would look for an email in the folder I thought it should be in, only to find it in another because the email could easily fit two different folders. At the time I had to choose a one folder. With Gmail, I can choose multiple labels so months down the road it will show up in both. This greatly saves time and can keep my mail size down. If it doesn't have a label, it must not have been that important!

I agree. It takes litttle extra time to create sub-folders. The danger is in spending lots and lots of time coming up with the "perfect" filing system. Or filing unread messages until later and then having some subfolder with 2000 unread messages. You do know it is there and it will cause the same tension. :-)

-fred

Re: lots of time
Well, I'll admit, it took a few months to come up with a lot of the sub-folders, in my case, but that's the thing- As your incoming mail changes, you can change your filing system to work. That's what I was getting at in my anecdote. If you need to change something (usually just adding another folder and matching rule), it doesn't take that long. Rarely would you have to split something up even further.
FYI: the filing system w/ folders I was referring to was using it with Apple Mail, not some online email account. I figured we were talking about some on-computer email storage like POP or IMAP, not online accounts. To do something like this for an online account would take a HECK of a long time (unless you're using something like Apple Mail to make new folders in an IMAP account). The premise that your email would be quick to search in the article had me thinking along the lines of spotlight, not an excruciatingly slow webmail client. People who need serious access and record of their email aren't going to entrust it to an online client anyway. I've been burned once, and that's all it takes.

Re: labels...
One thing you can do to replicate that behavior is to have folders like you have now, but for those things that could fit another category, create a smart folder. That will create that second place where items from one (or several) folder might also fit.
This might not entirely replicate Gmail's labels, but it can catch a lot of things you are talking about.

I guess everyone has a method but IMHO the 3 bazillion subfolder methods described above are CRAZY (I know I used to do just that). Then I discovered DevonThink Pro Office and the Archive email to DevonThink option. PERFECT the ease of my gmail labels with the power of DevonThink's knowledge mining.
(Disclaimer: Satisfied user in no way associated with Devon Technologies)

I've been using Smart Mailboxes in Mail.app for a while to sort things out, but with some email accounts, such as Google via iMAP, it actually leads to MORE work.
For some bizarre reason deleting a message from the "inbox" or Smart mailbox in Mail.app does not delete the message from Gmail's Alll Mail folder; requiring you to sift through and delete them all all over again. Pretty annoying since it works fine with all my non-Gmail imap accounts.

Something I've found helpful is DockStar. When you start using Rules to automatically send mail to different folders, you will lose the red indicator for new mail in those folders. This allows you to 'tag' up to 5 different folders with different color/shape notifications.

Here's another idea:
DON'T EMPTY YOUR INBOX
Bear with me... you can flag any messages you need to come back to and then create the following smart-folders:
INBOX - UNREAD (think of this as your real inbox)
FLAGGED
This way you're inbox is your filed/archive, you'll never have to go looking for anything (archiving is too cumbersome, having to re-import)
Smartfolders and search are much better tools and this is way easier than going through thousands of emails (I have over 5,000 in my inbox)
The only thing missing with this system is a way to differentiate between action and later. I use flagged as later and if something is actionable - either do it now (under 2 mins) or create a task.
I use omnifocus instead of tasks - its a great GTD product and you can use a shortcut straight from mail.
You can also leave a message unread (customize the toolbar so you can hit 'mark as unread') - if you're not sure what to do with the message yet.
I don't see the problem with a large inbox, data storage is getting cheaper and its so handy if suddenly you need to find anything - can search online etc. Apple is about to increase storage on .mac (.me) to 20GB.

Great article, and I laughed out loud when I read it.
My InBox currently is 15550 messages with 5704 unread. Filing the messages into three folders won't really help me. Although my InBox will be empty, my Action mailbox will have about 4000 items in it!
For me, I usually juggle about 5 projects in my head at any one time and only scan the InBox to look for messages about those projects. The rest just stay there until I can get to them -- if ever.
What I need are two PA's to handle email and calls so I can focus on getting work done instead of making the organization of relentless outside communication my primary job.

I like the idea of this simple system. But how does it work with gmail? I use Apple Mail / gmail combo and it is a bit of a pain. Whenever I do a search there is at least 2 copies of each and every email. I spend a lot of time skimming trough endless, seemingly identical emails. I really have no idea how to solve this riddle. If I create three folders in Apple Mail, how will this be reflected in gmail? and how will it affect my search results? Will I now get four six or eight copies of each and every mail?

Thanks for this article. It got me motivated to tame my mailbox. It took some work, but I finally got it straitened out. The problem I had was one account was POP and the other imap, I have an ipod touch and didn't like that changes were not tracked. So now i have those emails forwarded to the imap account. I also set up an account on google strictly for backup. I am in school so I set a rule with a little longer than a semester, and once the date sent moves beyond that, the mail is redirected(to retain sender information) and then deleted. I also have filters in gmail to add labels as stuff comes in.

For those looking for a way to replicate Gmail's (fabulous) labels in Apple's Mail.app, you might want to check out Mail Tags:
http://www.indev.ca/MailTags.html
It is commercial software, and at $30 isn't exactly cheap. But it does way more than merely add tagging to Mail. There's a free demo, and good screenshots, etc., so you can check it out thoroughly before deciding to buy. (Not associated with MailTags, except as a customer.)