Projects as Contacts Method
I think your assesment of the 2 approaches is pretty accurate. I can only talk about the projects as contacts method, as I've not used the add-in. Here are my thoughts on the Projects as contacts method.
Pro's:
==============================
1. It's been powerful for me to have the choice of being able to view NA's by both Context (grouped by Category) or by Project (grouped by Contacts) and to be able to quickly switch between to the two views. I use a custom view in outlook created by draging a panel from the filed chooser to the "Group By Box" and then saving that view as a custom view. When I do a weekly review of all of my NA's in Outlook, I use a saved "by project" view so that I don't lose my place in the review list.
2. Creating a custom form to collect data about my projects has given me more ways of organising and looking at my projects, as I can create addtional fields to capture attributes about my projects. I have a number of internal customers who are businesses within my whole division. It's good when I'm talking to a person in that business to be able to filter on just that businesses projects that I have going at the moment.
3. I can use the "New Task for Contact" option when I'm in my custom project form and make a whole lot of next actions with the project/contact already attached to the NA.
4. I can embed links to the soft copy versions of project support documents within the custom form. You can probably do this in the add in as well (?) but I thought I'd list this as an advantage.
Cons:
==============================
1. Had to build a custom project form in Outlook, which took a bit of time. I didn't like the deafult form as I couldn't list NA's and park them there.
2. I have a PDA that runs Windows Mobile 5 and I cant see the contact attached to the NA in the Tasks applet on my PDA. Therefore I cant filter by it, either. When I capture a NA and I'm out of the office, it shows up with no project against it, so its a an extra step to correct this when I'm next in the office.
I'm sure there's other benefits. I've been using this approach for @ 18 months and it seems to be standing up quite well. I'd love to hear what other people think.
regards
Warren