The Archive Database in Project Server 2007
The archive database in project server 2007 isn't really a database that facilitates a functionality of archiving projects. The archive database is the database used to backup projects to and restore projects from.
The projects will still exists in the Draft and Published Databases.Looks like archiving of projects will still need to be done in a way as described in this link.
Another interesting information on the backup of databases is the backup is an all or nothing process but the restoring of a project can be done on an individual basis.